Teaching your kids how to manage money is one of the best things you can do as a parent. In this article, you will discover five ways how you can teach your kids good money habits.
Teach your kids how to manage their money.
Give Them an Allowance
Giving your child a weekly or monthly allowance is an excellent way to start teaching your kids how to manage their money. When they are given an amount of, for example, $5 per week, they can then choose to either save it so that they can buy something bigger in a few weeks time or choose to purchase something smaller each week.
Let Them Earn More Money Through Doing Small Tasks
Alternatively or additionally to giving your kids an allowance is to let them earn by completing small tasks such as mowing the loan to helping in the kitchen. That shows kids that money is earned by working and gives them a certain degree of control of how much money they can make each month.
Give your kids incentives to save.
Give Incentives for Saving
A great way to teach your kids how to save money is by giving them incentives to save. For example, you can tell your child that for each $10 he or she saves, you will add one more $1 to his or her piggy bank. That way your child will indirectly learn about the benefits of compound interest when saving.
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Help Them Set and Work Towards a Financial Goal
You can also teach your kids good money habits by helping them set and work towards financial goals. For example, should your child want a new bicycle, you could write out a timeline with him or her that outlines how long it will take to save for it using pocket money and money earned through doing chores. Also, you can incentivize him or her by adding to their savings every time they hit their monthly savings goal to speed up the process. This will help them stay engaged in the process and learn how to work towards a big financial goal.
Teach Them to Compare Prices and Look for Discounts When Grocery Shopping
When you take your kids along for your weekly grocery shopping, include them when scoping out discounts and show them how you are comparing prices. That will teach your little ones to look for the best price-to-value ratio and to be more budget-conscious when it comes to purchasing food and other basic goods.