Some people are reluctant (or refuse) to involve their children in their financial affairs. For some years I agree. But sometimes you need to involve your children at least a little, bit to learn the financial management process and, it will help you keep you accountable for your actions.
TEACH YOUR CHILD ABOUT MONEY MANAGEMENT
In this article, we will consider some ways in which you can teach your child to be responsible when it comes to finances and debt.
FINANCE MANAGEMENT
We will discuss a number of approaches to debt management and youth finance management.
Most of us, even older ones, know little about financial management. This article can also help you to manage your money and debt.
First let's talk about setting goals.
01. Why do you need to manage your money?
02. What are you trying to accomplish?
The first thing you can do to introduce your child and perhaps yourself is to track where your money is going. How often do you ask, "Where did I spend all that money?". If you have ever asked that tracking your money can give you a better understanding of how to manage your budget better.
There are workbooks you can purchase or you can use a simple brochure. Get your child to do this with you so that you can both read. If you make it a family affair, your child will probably pay attention and participate, because they will see how you manage your money.
It has the added benefit of making you manage your money better, setting a good example. In this new workbook you and your child who writes are writing down all the expenses. Every time you or they spend money, it is written down. Not in the category, what actually paid for with money. You will be able to review this later as you create sections such as, "Things I could have done outside."
When, you review your workbooks together, sell them. Each of you can write down what expenses the other person might not have been able to pay and how much each of you would have saved if you had not spent those extra expenses.
It is not a bad idea to make a few mistakes intentionally so that your child will gain confidence that he or she will be able to manage his or her money and point out what the unnecessary expenses are. You need to understand that the spending habits your child acquires in adolescence will last a lifetime. The grant is fine, but only until they get a job.
Never make enough money to get the things they want most. Make them learn to save money to buy those things. If they already have a part-time job, no more money. They will respect the money they earn far more than the money you give them. When your teenager is 16 years old and has a job, help him or her open a test account. Teach them how to rate their test book. If you have been making a workbook with them, this should be easy. You can help them get a prepaid credit card or teach them how to use the bank card that comes with their new checking account with commitment. Also, if you both make your own book and mark down everything you spend on it, managing your bank card will be easier. And by continuing to make a workbook, you will both learn how to save a lot of money because you will know where your money is being spent.
We all want to help our young people and we want to buy them good things, but as parents we also need to teach them the burden. There is nothing more important than teaching them to deal with money and debt. Buy them for necessities, but make them pay extra. That applies to clothing, school uniforms, or anything else, especially when your child decides that he or she wants a better, more expensive version of the material in question. Let them pay extra and they will value their money more or they will learn to do without something more expensive.
BASIC FINANCIAL SKILLS
There are ten basic financial skills that each child should learn, many children are more receptive to comments from their parents before they reach the age of thirteen, than after.
01. Money does not grow on trees
One of the most popular and oldest quotes around. It is important for children to understand from the beginning that money is a limited resource, that the mother and father bank account will eventually stop if they continue to withdraw from it.
02. People go to work to earn money.
Money is something that needs to be earned, you can never be financially secure sitting around doing nothing, and expecting to be given by people.
03. Credit cards are a way to borrow.
Believe it or not, research has shown that an alarming number of teens are unaware that credit cards are a form of borrowing. If they do not understand this basic concept, it leaves them vulnerable to credit card debt.
04. Avoid borrowing money where possible.
Where possible, money should be saved rather than borrowed as borrowing attracts additional costs such as interest, which in some cases, doubles the amount you need to repay.
05. There is good debt and bad debt.
There is no such thing as a good loan, but some types of debt will make you money while others will cost you money. A good loan can include a home loan, a mortgage or a business loan, as these items tend to make more money than the interest rate you have to pay. Bad credit can include credit cards, personal loans or car loans, as these do not make you money.
06. Money Position
If you don’t have the money to buy something, then you can’t afford it.
07. Spend less money than you earn.
Many people these days spend 10% to 20% more than they earn, creating a vicious cycle of high credit card interest rates, long hours at work to pay off credit cards and in some cases even collapse. Information on how to manage your money seems lost, make sure your child learns this important lesson!
08. A portion of your money should be given to the needy.
About 10% of your money should be given to those in need.
09. Pay yourself first.
This is what I call your mental money. Allow 10% of your money to be spent as you wish.
10. Save at least 10% of your money.
Like the allocation of money, the ability to save money seems to have been lost over the past 20 years, when fewer people than ever before are investing half of their money.
With these lessons well and truly learned, your child should have no problem managing their finances, and avoiding the trap of debt. Do not put your child at risk of being one of the hundreds of thousands of young people who are declining every year.
Managing money does not mean keeping it and locking it permanently. It simply means being alert, spending money wisely, and acquiring the habit of saving.
Teach your children that giving to others is a good thing. This could be for local terminally ill, homeless people, or charities that they love. This will help them to be round, respectful of others regardless of the situation and have a greater appreciation for their lives and prosperity.
They will learn that money comes back to you in more ways than you can imagine. Encourage your child to buy a magazine or diary where they can record their dreams and aspirations. This enables them to dream big and look forward to a life full of prosperity. There is nothing wrong with accumulating wealth in order to achieve these goals. Money is not evil
I hope this article has given you some ideas on how to teach your child how to manage himself/ herself in financial skills and management category. To do the same thing, remember that what you teach your child about money and debt now will determine how successful he or she will be in later life. So take time to teach them. It is never too late to learn,
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