Teaching children how to budget will stand them in good stead to become responsible, fiscally savvy adults.
But when is a good age to teach them the art of budgeting?
According to experts, children of any age can learn to budget, but the trick to making these lessons stick is knowing how to teach them in accordance with their age.
Below are six ways to teach children of different ages the art of budgeting.
Pre-school
• Use a clear jar to save. While piggy banks are fun, children cannot physically see the money inside, so cannot see it growing with every extra Rand they insert.
When you use a clear jar, they can actually see their savings grow.
• Show them that things cost money. If there is a specific toy your child wants, help them grab some money out of their jar, take them to the shop and help them hand over the right amount.
This simple act will be a much more powerful lesson than a short lecture on what their latest toy car cost.
Pre-teen
• Show opportunity cost. This is another way of saying: ‘If you buy this dress, you won’t be able to buy those shoes’.
This shows them there are consequences to their decisions and, at this age, children should be able to weigh up such choices to make a decision.
• Make them earn their pocket money. Giving children pocket money after they have completed chores such as mowing the lawn, washing the car or helping with housework, shows them that money is not simply given to them, they have to earn it. This will prepare them for the working world.
Teenagers
• Help them find a job. By the age of 16, children can legally work, provided it does not interfere with school work and sports, help your child get a weekend or holiday job.
This will make them appreciate the money they earn and help them to spend it wisely.
• Teach them the dangers of credit cards. Falling into credit card debt can be a death trap. Make sure to teach your child the consequences of credit card debt so one day, if they do get one, they will use it wisely and not just rack up debt that is impossible to pay off.
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