Tips to teach your children to spend money economically

1. Practice saving habits

Show your children the importance of saving money. Since they are not adults, children have never experienced the hardships or harsh realities of life, they will not know how to save consistently.

To teach your child to save, form the habit of only buying things they need from the money they save each month. For example, you give your child 5 thousand every morning and your child wants to buy a toy that costs 250 thousand. Ask your child to save enough money if he wants to own the item. This teaches your child the importance and benefits of saving, and also trains them to be patient. To encourage your child to save for short-term goals, it is best to put a picture of the toy or item they want on each jar. This serves as a visual reminder of what they are trying to get.

2. Open a separate account for your child

Once your child has saved up a decent amount from their piggy bank, take them to the bank and open a personal savings account. You might even want to let them count the money they’re depositing, so they can get a better idea of ​​how much money they have.

However, do not overestimate the value of the money they have. Parents should remember that this saving must be maintained continuously and must ensure the goals they are aiming for. This will create a great source of motivation for your children if they understand that their money will increase over time as long as it is not used.

3. Tell your child where money comes from.

Two famous Italian psychologists, Anna Berti and Anna Bombi, observed that children between the ages of four and five often think that everyone has money and that banks are places where money is given out for everyone to use. Most children have only seen their parents and relatives go to the bank counter or ATM to withdraw money, so it is not surprising that they think like that.

Slowly explain to your child where money really comes from. Tell your child about the work you do, how you get paid, why the bank gives you money. Explain that the time you spend away from your child during the day is for work, to earn money. By talking to your child, they will gradually understand that money is earned through work and effort; therefore, they should not waste or squander the money they earn.

4. Allow your child to learn from mistakes

Teaching your child the importance of saving money is a process. You have to accept the fact that mistakes will happen. For example, your child may spend too much money on an unnecessary item. While it may be easy to steer your child away from this mistake, sometimes it is better to sit back and let it happen. This will teach your child that they should be more mindful of their money than spending it on things they don’t need.

This can be difficult for us as parents. After all, money is valuable, and you don’t want to see your child misuse it. However, these mistakes will lead to valuable life lessons. You will find that your child will not be tempted to do this again. It encourages your child to think more about their spending habits. If your child makes too many mistakes, it is time to step in and address them.

5. Teach your children how to budget

In addition to setting savings goals, it is important that your child understands how they can achieve them. Therefore, it is helpful to teach them how to budget. There are many budgeting apps that you and your child can explore and use for free. Show your child how you divide your monthly budget between the necessary expenses.

Allowing your child to use budgeting apps also teaches them to track their spending. Your child will quickly understand that they need to plan their finances to successfully maintain a balanced budget. Do some research on the budgeting apps available to you. Whether you have a tablet, smartphone, or Android, there are plenty of apps your child can use to help them become better financial planners in the future.

According to VOV