Pocket money! is it worth it Part 3 | Articles

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22 May


Pocket Money! Is it worth it Part 2


Train a child in the way he should grow and when he is older, he will not depart from it.     
The Bible

Money management is a complicated skill. There’s a reason why financial advisors exist. But what if our kids could avoid hiring advisors when they get older?

What if their adult life wasn’t based on bad financial choices? How great would that be?

I have a few tips on how this could be made a reality.

Role Model
First things first; TRY. TRY very hard to be a good role model. Children are visual. That means they see all that you do and consciously or subconsciously adopt your behaviors. If you have spendthrift tendencies, it trickles down. If you’re big on saving, they learn to do it too.

Lists.
Shopping lists are what keep us from impulse buying. But the only way a comprehensive shopping list can be drawn is if the children are aware of the relative price of items that they like to purchase. This way they always keep this in mind whilst planning for their money.

Saving
In the spirit of children being visual, it could help to teach them about short term and long-term goals. The easiest way would be through a piggy bank and a spending jar. The monies that go into the spending jar are for short term goals, like candy. Then the money that goes in to the piggy bank is for long term goals like toys or even souvenirs during a trip. That way they carry these lessons to adulthood.

Opportunity cost
Some times our young ones will buy ice cream. Then go further along the isles in the supermarket, see chocolates and decide that they want that too. Problem is; they already spent all they had set out to on the ice cream. So, they try to wiggle their way out of this situation. Don’t let them. Better yet help them understand that when you use money to buy something, you give up the chance to buy something else with that money. Bearing this in mind then to learn to focus on their needs more than their wants.

Spending
This is basically teaching them to let go. That once you spend money, it’s gone and that’s alright. You can be more careful next time but there’s no need fixating on it.
 

Authored By SJAM

 


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