3 ways you can teach your children to be smart about money
When children receive gift money, it can be hard to know what to do with it. Do you allow them to act like children and spend it all at once? Do you make them put it all in savings? This year, use one or all of these techniques to teach them how to be smart about money.
Make a pro/con list
Instead of letting your children impulse buy to their hearts’ content, have them make a pro/con list. Start with short-term pros and cons of the different items they want. Then, discuss the longterm benefits and negatives of each item.
Hopefully, this practice will result in your children making better decisions when it comes to what to spend their money on. Of course, they are only children. So, they might still make bad decisions. At least they will have learned a good technique they can use when they’re older.
Once your children become adults, they will need to know the skill of budgeting. When they receive gifted money, seize the moment and give them some hands-on practice. Talk to your kids about wants and needs. Have them separate their cash into categories.
Maybe they need new shoes but want brand-name ones. Have them make two different budgets with different priced shoes. They’ll see they can get more of other items with the cheaper shoes. Then, they’ll have to decide which budget works best for them.
Make them wait
Even adults know that what you want one day, you may not want the next. That purse you see in your favorite shop becomes less appealing the second you leave the store. Children can learn this same lesson the easy way.
By making your children wait a week or two to spend their holiday cash, you can feel better about what they buy with it. Perhaps having some time to think will result in them buying items that will actually get worn out, unlike those quick purchases that only get used once.