Children learn the basics of everything from their parents. Money is difficult to earn and even more challenging to spend wisely. You can teach your child how to manage their hard-earned money from a young age.
When your children start earning their own money, the first question becomes how to manage it? After paying for rent, groceries, and other expenses, they should have some money for themselves. You can teach your children the balance between spending too much and too little from an early age. You can guide your child to plan their expenditure. It will help them learn the worth of money.
When and how to start?
If you want to teach your kids about spending, the first question to answer is when to start? School years of your children can be the best choice for this. You start them on a basic allowance to educate them about money. There is a high probability that they will initially overspend, but that is the stepping-stone of learning. They will gradually learn how to prioritize spending their pocket money. It will allow them to figure out how to cut costs and spend comfortably. When they can handle spending on their own, you can introduce them to saving.
How will they learn to save money?
School kids will take time to understand the concept of saving. They will spend their pocket money until it lasts, irrespective of the amount. Learning to save requires maturity. You may monitor their spending habits before introducing them to saving. The idea of ‘saving for the future can be hard enough for them. At first, they can learn to save a particular amount for some occasion or gadget they have their eye on. If they know how to spend, then the extra amount of their allowance can add to their savings.
You may encourage them to save for occasions like festivals and birthdays. When assigned a goal, the kids develop faster habits. While keeping aside money for a particular goal, they will gradually develop the habit of saving.
When to give your children Debit Cards?
When your child learns to manage their allowance and has a saving habit, you may introduce them to debit cards. This plastic money is easy to handle. Parents can also keep track of the money spent by the children. Here are some features that make it beginner-friendly –
- Debit cards are easy to manage. A cardholder can only spend the amount in their savings account.
- The parents get the bank statement and alert messages when their kids use it. Therefore, you can keep track of your kid’s expenditures.
- A debit card is the easiest way to give your child money safely. You can transfer the sum to their account, and your child can withdraw it from the ATM or spend using the card.
Your school-going kid can have a digital bank account and a teenager’s debit card. You can transfer the allowance money and keep a tab on your kid’s spending, while you can keep track of their expenses through the app and set limits for the amount that can be spent or withdrawn. You can also assign tasks and goals for your child to save or earn some extra money.
Managing money can be complex without basic knowledge. Simple strategies can help the children to maintain the balance between spending and saving. A child should learn how to spend rather than how to save. With basic knowledge about money, they can develop saving habits. They will know the strategies to have a better bank balance. These habits will help them be confident adults with excellent money management skills.