Learning how to budget as an adult is more difficult, so start your child out right by teaching him how to budget while he is young, and you will build good money budgeting habits right from the start.
These lessons are not necessarily easy for either the parents or the child, but when your child reaches adulthood and finds that he is able to manage his money better than his friends, he’ll have you to thank. He might not recognise that his proficiency with money is due to the lessons you gave him early in life, but you will have the satisfaction of knowing.
Include Your Child in Discussions about Your Finances
Lots of parents think that they should never discuss their financial situation with their child. The opposite is actually true. Bringing your kid into the family’s financial discussions will help to give him the context he needs to understand why certain purchases are not made or why holidays are not as elaborate as their friends’ trips.
You will need to determine what level of inclusion is appropriate for your child, but getting him involved even a little when he is young and then increasing his involvement step by step as he matures will give him the working knowledge he’ll need later in life when dealing with his own finances.
A Weekly Allowance Is a Good Teaching Tool
Some parents give a weekly allowance and some don’t. Sometimes the allowance is tied to household chores. Sometimes it’s not tied to chores but is considered a way of teaching kids to budget.
Keep in mind the value of giving an allowance as a method of budgeting for kids.
Simple Is Best for Small Children
Keep budgeting very simple when your child is quite young. The idea is to begin teaching the concepts of saving money for the future and prioritising how to spend it.
Many parents like to use clear glass jars for young children to put money into.
Get More Complex as Kids Get Older
As your child grows, you will find that including him more and more in financial decisions will deepen his learning about budgeting. Watch your child’s attitude toward money to determine how fast to bring him along.
You’ll find that teaching simple budgeting at an early age and then progressing step by step so that he can participate in decisions on bigger purchases will prepare him well for dealing with his own money as an adult.