Let Your Kids Develop Money-Management Skills
Let Your Kids Develop Money-Management Skills
Debts and a variety of fiscal deficits have taught our nation about the significance of financial transparency and economic stability and the same also introduced the economic defense mechanism provided by debt relief firms and debt management plans as the same outstretched their supports to the debtors. However, the present time has seen slight improvements and thus it is now all upon us to re-construct our financial career and what can be a better way to begin the task with our own children by imparting the knowledge and awareness of money-management skills in them. To start with parents need to set certain rules while giving kids allowances to cultivate good personal budgeting and money-management skills, as without parental guidance the same money can land up in wrong hands for wrong deeds. Nevertheless, they should keep in mind that money should be allowed to them only when they are old enough to handle them; and the same generally takes place when kids are in their teens and start making purchasing decisions. Thus some factors should be kept in mind before giving allowances to children. First of all parents must be aware of and clear about what the allowance covers; they should determine whether it should include clothing and books, or video games and accessories and so on. Then they have to make sure that the allowance is spent just on the things and objects it means to cover and nothing other than that. Also they should decide the kind of purchases that the children would make, as all available stuffs are not suitable to their tastes. Make your child follow these conditions and restrictions stringently. Also the parents can provide separate amount of allowance for separate purposes. That means the child will get one amount for clothing, another for books and another for leisure and so on. It may sound a little confusing in the beginning but the same will allow the child to allocate and spend money within the budget.
It is advisable not to give your kid a lump sum amount of allowances to spend for whatever he/she likes, as kids basically don't know how to budget properly. Hence on getting a lump sum amount every month will build spendthrift attitude in them and will probably use it all up by the end of the first week. So it's always better to begin with a small amount regularly till your kid catches up with age and maturity to handle more money wisely. It is also the responsibilities of a parent to guide their children about how to handle and manage the left-over allowance in case the children show sensibility and signs of savings. Thus a parent should set rule for them about the purchases that they can go for with the excess money. Lastly, if a child runs out of money before the stipulated time period, do not bail him/her out of the situation as the same will never teach them the value of money and the problems brought by its insufficiency. Help them to learn the lesson correctly form the incident by getting a less-perfect and much cheaper replacement for the object in need, so that they will think twice before over-spending again.
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