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How to Raise Cash-Savvy Kids with Budgeting

How to Raise Cash-Savvy Kids with Budgeting

When you have kids, you want to protect them from all the tough experiences that are out there in the world. The last thing you want is for your child to suffer or struggle to get to the top. However, the truth is that life isn’t easy. Rather than trying to shield your children, you could do them a much bigger favour by preparing them for what lays ahead. 

A great way to make sure that you’ll always have peace of mind when it comes to your kids is to ensure that they’re cash-savvy. If you don’t have to worry about your child getting into a ton of debt, because you know they understand how to save, it takes a huge weight off your shoulders. 

Since children rarely learn much about finances in school, it’s up to you to make sure that they’re ready to get the most out of their cash. All of that starts with just a few budgeting strategies. 

  1. Avoid Impulse Buying 

We all get tempted by purchases every so often. Maybe it’s a new pair of shoes for a wedding you’ve been invited to, or even something as small as a chocolate bar when you’re grocery shopping. However, when you’re teaching your kids to be as financially smart as possible, you’ll have to resist the desire to splurge. 

Make sure that they know how much work goes into each purchase by showing them that you plan for all the things that you buy. Only purchase the things you have on your list when you go shopping. If you deviate because you find something for a lower price, make sure that your kids understand why you’re making a change. 

  1. Don’t Keep Them Out of the Budgeting Conversation

The amount of information you give your kids about your budget will depend on how old they are. For instance, it’s no good walking your children through all your investment and financial decisions if they’re still in primary school. However, that doesn’t mean you should cut them out of the budgeting conversation completely. 

Make sure that your kids can see that you take time each month to go through your finances. You can even write your budgeting session down on the family calendar. If they ask you why you’re doing so much math, explain that you need to figure out how much money you have to spend for the month ahead. 

  1. As They Get Older, Include them in Budgeting

As your children start to get a little older, you can include them in the basic aspects of budgeting. For instance, you might ask them to help you add up the fees that you have to pay on your rent and car insurance this month (remember to double check those figures). You can also ask them to look through your expenses with you and search for places where you might be able to cut back and save a little extra. 

Including your children in budgeting, sessions give them an insight into what goes on behind the scenes with things like energy bills and food costs. That will make it easier for them to understand why you ask them to turn electricals off when they’re not using them and eat supermarket-own branded products. 

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  1. Don’t Hide your Loans from Them

Let’s face it; most people in life will end up with a loan at some point. Whether it’s the loan for your home or a personal loan that you recently got to buy a new car, or finish redecorating your kitchen. Hiding your loans from your kids won’t mean that they never have to borrow money themselves. However, talking through things like interests and repayments with them will help them to understand why loans are essential to take seriously. 

You can even include your kids in the search for new loans and credit card deals if necessary and show them why it’s important to track down the lowest interest rates with comparison websites. 

  1. Let them Learn the Hard Lessons

It’s tempting to save your kids from any failures or heartache they might experience in life. However, this isn’t as productive as you might think. Instead, you need your children to learn the hard way why it’s so important to manage their money. That means that if they end up spending their pocket money on sweets, and then they decide they want to go to the cinema with friends, you shouldn’t just give them extra money.

Let them see why it pays to be frugal with their cash and think about their savings. It might be a hard lesson for both of you at first, but it will pay on in the long term. 

 

*This post was sourced for dadvworld.com

 

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