How to Help Children Become Financially Savvy
Give your child a degree of financial independence., Guide the child in making decisions., Tell your child to think over his purchase before making a final decision., Once your child has made a decision, tell him he has to stand by it., Set a proper...
Step-by-Step Guide
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Step 1: Give your child a degree of financial independence.
This means that you should allow your child to spend money by himself.
However, keep in mind that the initial amount available to him/her should not be too large.
The child should be old enough to understand addition and subtraction. -
Step 2: Guide the child in making decisions.
Make him aware of the consequences of his choices.
For instance, if your child decides to spend all his pocket money on the first day, help him understand that his money is all gone for awhile. , For example, tell him that spending all his money on a toy car now may mean that he will not be able to purchase a toy airplane later.
If he asks for advice, give him suggestions but let him make the ultimate decision. , This also means that you cannot give in to his demands if he changes his mind after a purchase.
For instance, if after a few days your child decides he wants a new toy but has no money, you must be firm and tell him he will have to wait through a previously specified time period. , Don't waste money on impulse purchases.
Teach the value of money when you are making your own purchases.
For example, you can tell the child, "I want to buy both of these ,dresses but if I do, I won't be able to afford any shoes, so I am going to think about whether I need a second dress or a pair of shoes."
Your child will make mistakes and there will be tantrums, but if you are firm your child will realize that you really mean it.
He will then think about his money seriously.
Of course, it will take time and practice, but in a short time children can learn how to spend their money wisely, especially if their parents make the effort to teach them. -
Step 3: Tell your child to think over his purchase before making a final decision.
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Step 4: Once your child has made a decision
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Step 5: tell him he has to stand by it.
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Step 6: Set a proper example.
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Step 7: Be patient.
Detailed Guide
This means that you should allow your child to spend money by himself.
However, keep in mind that the initial amount available to him/her should not be too large.
The child should be old enough to understand addition and subtraction.
Make him aware of the consequences of his choices.
For instance, if your child decides to spend all his pocket money on the first day, help him understand that his money is all gone for awhile. , For example, tell him that spending all his money on a toy car now may mean that he will not be able to purchase a toy airplane later.
If he asks for advice, give him suggestions but let him make the ultimate decision. , This also means that you cannot give in to his demands if he changes his mind after a purchase.
For instance, if after a few days your child decides he wants a new toy but has no money, you must be firm and tell him he will have to wait through a previously specified time period. , Don't waste money on impulse purchases.
Teach the value of money when you are making your own purchases.
For example, you can tell the child, "I want to buy both of these ,dresses but if I do, I won't be able to afford any shoes, so I am going to think about whether I need a second dress or a pair of shoes."
Your child will make mistakes and there will be tantrums, but if you are firm your child will realize that you really mean it.
He will then think about his money seriously.
Of course, it will take time and practice, but in a short time children can learn how to spend their money wisely, especially if their parents make the effort to teach them.
About the Author
Samantha Walker
Specializes in breaking down complex practical skills topics into simple steps.
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