Here are four ways to teach your kid (of any age) to budget like a pro and make it second nature by the time they're adults.
It is very important for children to learn how to manage money, especially in today’s era. Once they can count till fifty, they can be taught to budget and manage their own pocket money. Here are some tips to make the financial lesson fun for kids.
Children love playing shopping-themed video games (both real and make-believe). Make a note of everything you need, how much it costs, how much money you have, and compare the two amounts.
This teaches kids the hard truth that wants and needs don't always come with the same price tags. When this is established, budgeting may be introduced as one of the most valuable life skills kids acquire.
After they've got it, you may introduce the notion of a savings goal to help them learn to plan ahead and calculate how much they'll need to put away before they can afford anything.
Talk to them about the value of weekly savings and how long it will be until they reach their target amount. Better still, show them how they can have it sooner if they save a little bit each week or complete extra tasks to earn more pocket money.
This is a valuable lesson in and of itself. You might want to save them from this difficult situation, but doing so might do more harm than good in the long term.
Alternatively, you may give them advice on how to improve for the future. Bring up the concept of price comparison (would it have been possible to save money, or at least to prevent impulsive buys). and how they might find more ways to supplement their allowance.
To learn about financial responsibility and budgeting, kids need to have some authority over their own money. The first steps toward solid savings and budgeting practices are gaining an understanding of one's financial situation, one's spending patterns, and one's potential for earning more money.