DO PARENTS KNOW? | GUIDING YOUR CHILDREN EFFECTIVE MONEY MANAGEMENT HABITS

TIN TỨC

10/02/2022

In your child’s journey of growth, the lesson of personal finance management is one of the important types of knowledge and greatly affects their development and life later. Money is the main trading unit in the present, we can use money to meet the needs of daily life as well as serve our personal preferences. However, “money” also has many consequences that directly affect our lives. Therefore, education on money management is very essential.

However, instead of educating their children to manage money rationally, some parents tend not to allow their children to be exposed to money as children, while early interpretation to children of the concept of money is very important. In order to form an understanding, thought, and value for money, parents need to give children the ability to understand finances using some of the following methods.

Start With the Basics at a Young Age

According to some studies, the earlier parents begins your child’s money management education, the better, and the appropriate time to start the first lesson is age 7. Because at this age, money habits and attitudes are already formed.

Parents should start with explaining what money is and how it is used. Actually, showing children how money works is more effective. So let them see you making purchases with cash. When making a payment, explain to your child that you’re using money to buy stuff. Then they will understand the money and how to use it in the most specific way.

Instill a Habit of Saving

Your child’s first contact with money will likely involve shopping. After your child understands the function of money, then you need to explain to them where the money comes from and how hard we have to work to earn more income. It’s also a way for your children to be aware that money isn’t just for spending — they should also save money regularly.

You can help your child practice his savings habits by giving the piggy bank or a savings jar so that he can deposit money and set short-term savings goals such as buying a toy he likes or intending for the near future. This helps your child manage money better, clearly distinguish the priority when shopping to spend properly and think carefully before using the money. As they have gotten older, they are now able to save for longer-term goals.

Create Opportunities to Earn Money

Children need their own money to be able to learn how to make decisions about using it. Of course, parents can give your child a small monthly or weekly allowance, but besides, parents should consider creating conditions for your children to earn their own money by doing some housework. However, there are some simple housework such as washing dishes, babysitting… They won’t get paid because this is what a family member needs to do. Parents can come up with some more special tasks such as: cleaning the garden, washing the car …

 

Help Kids Learn to Make Smart Spending Decisions

With an allowance and self-determination in hand, parents will be worried that your child will quickly spend all that money. However, instead of worrying, you need to explain to your child clearly this will be the amount of money for them to spend for a certain period of time and will not receive more until convention time. Therefore, they need to spend appropriately so as not to encounter unexpected situations. Parents need to help them understand that spending isn’t always about buying what they want. You need to be instructed how to prioritize the use of money for what you need before getting to what’s less important.

Model Good Financial Behavior

Just as important as the lessons parents teach your children, it is that you yourself become an example of managing and using money rationally in front of your children. For example, if you complain about spending too much on certain things and then take your children on a shopping spree, you’re sending mixed messages. Instead, make sure you model the behaviors around money that you want your children to adopt. If you want your children to develop good spending and saving habits, they need to see you making smart spending and saving choices. In short, practice what you preach.

Educating your children about personal finance is a process that can take time and patience. But if you put in the effort and continuously communicate a clear message about money, you will instill good habits that will serve your children well.

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