Good Money Management Starts Early

Children are, of course, fantastic learners, and if you want to make sure that they do not have debt problems later in life it is important to teach them good money management skills from an early age.

This will help them avoid getting into financial trouble when they get older. Parents who teach their children how to budget their money when they are young are passing on to their children good money habits. However, children should also be told what happens when they act on impulse and spend beyond their means.

 

 

Parents should explain to their children how spending their money responsibly is the right thing to do, even if their parents aren't exactly financially sound. We all make mistakes, so if we can keep our children from making the same mistakes we did we are giving them a firm foundation to build on. When they are old enough to understand the concept of a credit line, you should explain to them how credit comes with responsibility and that it should only be used for emergencies and not just because they want to go out and spend money. Unplanned expenses such as medical bills, vehicle repairs, and other unexpected expenses are acceptable reasons to use a credit card, but they should pay it off as soon as possible to keep the interest from building up on it.

Children of parents who are under financial strain also feel the stress that is bothering their mum and dad. They may not understand what is going on, but they still sense that something is wrong. As a parent you should never hide from your children the money situation that is affecting the family. Parents should include all of the family members when planning out a household budget and paying off bills if the children are old enough to understand what you are talking about. This way they understand why you tell them no when they want something.

While younger children may not be old enough to understand what is going on, they do know that their parents are having problems meeting the bills. They may even think that they have to do something to help their parents meet the bills. This is a wonderful gesture on their part, but you should explain to them that it is not necessary. Sharing the fact that money is tight with your children is one thing. Overburdening them with it is another. All you need to do is calmly explain to them why they can't have the toy they want and help them come up with an alternative method of getting the item they want, such as saving up their pocket money.

 

Discuss the household budget with your family and brainstorm ideas on how you can save money. You will be surprised at some of the suggestions your children come up with, and never discount them. Don't be afraid to sacrifice some luxuries for a period of time and encourage all of the members of the family to do things to save money, such as turning off lights when they are not being used. By including your children in these activities and working with them when they do receive money to help them manage what they have, you will be teaching them good money management values.





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