Content

• Steps
• Method 1 of 1: Adults
• Tips
• Pocket money
• Caveats

As parents, you must help your children acquire life skills. One of these important skills is the ability to manage money. Children should be taught how to spend money from an early age, and the habit of saving should be developed. By teaching this to children, you will save them from financial problems in the future.

Steps

1. 1 Be a role model. Show your child your budget and explain how you can save money by comparing prices in different stores. Take it with you to the bank and show how you deposit money into a savings account. Explain to your child what you are doing along the way.
2. 2 Invite your child to participate.
   
   
   • Ask your child to help you find better deals on a particular item in the store. You can also ask your child to make a list of products to buy based on your budget. Before going to the store, ask your child to look in the refrigerator and assess what the family will need in the coming week. After that, let the child make a shopping list and let him go to the store. As your child fills out the grocery cart, ask them to match purchases to your budget. You can give him a calculator.
   • Encourage them to look for discounts and sales.
   • Calculate your family budget with your children. Teach them to save money, for example, turning off the light when leaving the room. When discussing family budgets with your child, remind them not to share this information with friends at school.
   • Plan a family vacation with your child, asking him to look for great fares for air tickets, hotel rooms and car rentals.
3. 3 Let's give pocket money. Opinions vary as to whether it is worth giving pocket money as a reward for a child's affairs (see Tips).
   • If the child is young, give him some pocket money until he grows up and realizes its value.
   • Give them pocket money in bills and coins so that they can save them in separate jars for various purposes.
   • If your child's age and capabilities allow him to work part-time, encourage him to do so instead of just giving pocket money. This will teach him how to properly manage not only money, but also time.
4. 4 Buy a piggy bank.
   
   
   • Small children can buy a piggy bank in the form of a toy so that they can temporarily store their money there.
   • Older children can use banks with inscriptions indicating the purpose of the money.
   • Open accounts for them from which they can withdraw money when they grow up. Older children can be told about bank interest.
5. 5 Teach economics in a fun way.
   
   
   • Teaching kids about finance shouldn't feel like lectures. It can be fun. When explaining difficult terms, use funny illustrations to help your child remember the material.
   • Buy a board game like Monopoly that will give them an idea of ​​the value of money.
   • Look for comic books about money. For young children, books like King Midas or The Adventures of Tom Sawyer are great. For teens, buy Rich and Poor Dad.
   • Find educational finance websites for kids. Let the kids help you plan your monthly budget, fill out receipts, and pay utility bills.
6. 6 Budgeting should include a savings plan, regardless of the amount. Take a look at the following sample budgeting:
   
   
   • Some people put some of their money aside for charity.
   • Put 20% in a savings account, savings bonds or stocks.
   • Save 30% for a toy, game, or other purchases.
   • Set aside 40% immediately for everyday expenses: groceries, children's canteen, clothes, etc.
7. 7 Set boundaries.
   
   
   • Don't add money to your kids if they are spending too quickly. Let them feel the consequences of their actions. This will prepare them for independent living while they still live under the same roof with you. Financial companies are well aware that student credit cards are the most profitable, as parents are always ready to help out their children when they are "broke". So train your children to live within their means.
   • Don't buy everything your kids ask for. Budgeting involves knowing how to buy things wisely. If you train them to buy whatever they want, they won't learn to prioritize, which is a key part of fundraising.
   • Teach your children to say NO.
8. 8 Keep them in a shopping log so they can keep track of where their pocket money goes. Review it together regularly.

Method 1 of 1: Adults

1. 1 At the beginning of the calendar year, sit down with your child and discuss how much money is spent on their clothing and other expenses. Together, create a spending plan that includes savings on clothing, games, books, gasoline (if children drive), and school supplies.
2. 2 Highlight the calculated amount and deposit it into your child's account. You can deposit a certain amount monthly, or deposit the entire amount at once.
3. 3 Let the children be responsible for the cost of clothing and other items themselves. Tell them that they can decide for themselves how to manage the amount allocated to them, and how much money to spend on each item of expenditure.
4. 4 Encourage children to look for a part-time job, especially if they want to increase their budget.
5. 5 Review your budget every couple of months, and make changes if necessary.
6. 6 After a couple of years, when they start making their own money, gradually cut their budget so that they become financially independent. When they start spending their own money, they will have more incentive to save.

Tips

• Teach them to value every penny.
• If a five-year-old child, to whom his parents give 50 hryvnia of pocket money per week, will save 20% of it, then at the end of the year he will have 520 hryvnia. This is enough to buy a share in most companies. See One Share.com. With an 8% increase, the share will cost UAH 1,120 in 10 years, when the child is ready to buy a car. If he earns 10 hryvnia per week, and invests 20% in a share, then when he is 15 years old, he will have 15,000 hryvnia.
• If your children are still young to understand what debit and credit are, teach them using cash as a visual aid. You can also give small children change, and older children money for board games.
• If possible, encourage your teenage child to open a bank account. (Few banks open accounts for minors, but if you try, you can find them.) It is useful for teenagers to be able to fill out checks, close or open an account and perform other financial transactions, and it is better if they learn this at home, when the consequences of mistakes will not be so painful for them.

Pocket money

• Expand the rights and responsibilities of children as they grow up. The amount of pocket money should allow the child to buy small things, otherwise this money will not be of value to him. At the same time, there should not be a lot of pocket money, otherwise the child will not learn to save. But, as the child grows up, this amount can be increased. This can be done in a planned way, or tied to a specific event.
  
  
  • One of the options is to increase the amount by UAH 10 per week every year, that is, a five-year-old child will receive UAH 50 per week.
  • Another popular option is to add 10 hryvnia for each class, that is, a fifth grade student receives 50 hryvnia per week.
• As the child grows up, money can be allocated on a monthly basis. This will help the child learn to plan.
• Adolescents can be given more responsibility by giving them the ability to manage their own money for clothes, school meals, and more. If you have recorded these items before, show the records to your child and have them keep track of them himself. If your child is smart about money, give him more financial rights. Many families have benefited from giving their children the right to pay for laundry and buy their own clothes.
• Some people think that children should earn their own pocket money. However, by paying for the work of children, parents teach them to help only for money, and erase their sense of duty. In addition, by failing to pay children in case of non-fulfillment of household chores, parents deprive them of the opportunity to learn how to manage a budget. The best option would be to combine two approaches: to give pocket money regardless of the performance of household duties, and not to deprive them of privileges if they do not perform housework, but to give money for completing additional work that is not their responsibility.

Caveats

• If one approach doesn't work, try another. All children learn in different ways.
• Think before deciding to give pocket money up front. Children, like adults, tend to take out "loans." They should get used to the fact that money only appears after you have earned it.
  • Another approach is to set up a reward system. You can hang a piece of paper with a list of tasks on the left and space for stars on the right on the refrigerator. At the bottom of the list there may be a list of rewards, with their value indicated in asterisks. The more stars a child picks up, the more reward he will receive. Here you can use your imagination and assign the cost of each job (from half an asterisk for simple tasks to three stars for difficult tasks). This approach will motivate the child to perform various responsibilities.Rewards can be very different: buy ice cream - 1 star; invite a friend to spend the night - 2 stars; go to the park - 3 stars; day with parents - 4 stars. Such a system will teach the child to procrastinate and plan, which is very useful in our time, the motto of which is: "buy now, pay later."