Making children work for their spending money is a great way to help them learn the value of each rupee. Money gives people decision-making abilities so if you teach your kids from an early age this is the best that you can do. Educating, motivating and empowering your children to become regular savers will enable them to keep more of the money they earn and do more with the money they keep.
Banksdirect will explain few tips on how to educate kids about saving and spending money:
- When giving children pocket money, give the money in denominations that encourage saving.
- Take your children with you to a bank when you open their savings accounts. Beginning the regular savings habit early is one of the keys to savings success. Don’t refuse them when they want to withdraw from savings for a purchase or you will risk discouraging savings altogether.
- Keeping good records of money saved and spent is another primary skill young people must learn. Encourage children to keep receipts of all purchases and to make notes.
- Take children with you to the supermarket and other stores, explaining how to plan purchases in advance and make price comparisons and also checking for value, quality, after-sales service, warranty, etc. Spending money can be fun and very productive when spending is planned.
- Allow young people to make spending decisions, both good and poor, and then encourage a discussion of pros and cons before more spending takes place. Encourage them to employ common sense when buying.
- Alert children to the dangers of borrowing and paying interest. Be cautious about making credit cards available to young people. Set a limit on their spending and require them to pay related costs, including interest and the annual fee.
- Discussion on topics should include the difference between cash, cheques and credit cards and also wise spending, how to avoid the use of credit and the advantages of savings. With teenagers also discuss on how to economize at home and alternatives to spending money.