Reasons Why Parents Should Teach Their Kids Money Management

Start em young! If a kid never hears of the concept of money management or budgeting, when they need to start doing this for themselves as an adult, they will have a hard time. Here's some reasons why you should teach your kids how to manage their money.

Children are great at spending money, but do they understand its value? Kids, like any of us, enjoy shopping and want to grab this and that all the time! However, they don't understand how much the items they are getting are actually worth. They simply still don't grasp what "money" means, where it comes from or how much work it takes to make it.

So, here are some reasons why you, as a parent, should teach them money management.

They shouldn't spend more than they have 

Children won't be working to earn income at this point; however, as a parent, you might be providing them with a weekly allowance, or they might have other ways to earn income, or they may get monetary gifts. You need to help them understand how to allocate this allowance and that when they spend it all, there are no extras. They can't come asking you for more money after spending all of theirs. Making kids understand this early on, helps them live debt-free later on in life. They would know better than using credit cards all the time, or ask a family member or a friend for some cash just to spend on things that could be completely valueless.

They only earn money when they work for it

Kids don't understand where the money you spend as a parent comes from. They just see you use the ATM machine, and they don't grasp the number of working hours spent to earn this money. As a parent, you shouldn't give them allowances for things that should be done as part of their daily routine; for example, making the bed, or taking out the trash. However, you can help them by setting up a lemonade stand or selling their old toys.

It makes them more responsible as they grow

Kids understand concepts using visual aids more than anything. Start by showing them money and explain the value of each banknote or coin they have. It is also a great idea for parents to download a Free Financial Budget Planner Worksheet that helps manage cash flow and show their kids how to use it. Invest time in showing them how earnings are made, and spending affect their allowances. This will make them manage their money more efficiently as adults.

It teaches them to understand ownership

Kids are very possessive by nature. A simple wallet helps them understand the privacy of their money. They will become protective of it and start knowing how and when to spend money since it is coming out of their own pockets.

It is very important to start teaching kids about money and financial management at a young age, so that they would grow up to be great, responsible adults who know how and when to spend their earnings. Kids are very smart and understand things early on even if it appears otherwise. Repetition is the key when trying to make your kid understand any new concept. It is never too early to teach kids about the value of money. They should understand how to manage their allowances early on. Financial education is a crucial part of parenting since all kids do is spend. It helps raise a successful individual later on who can balance their earnings, spend with care, and most importantly, know how to save as not to be in constant debt.

Penniless Parenting

Mommy, wife, writer, baker, chef, crafter, sewer, teacher, babysitter, cleaning lady, penny pincher, frugal gal

Previous Post Next Post