This is a guest post by Kevin Craig who is a financial writer for various finance related Communities. He has helped lot of debt burdened people with free counseling on debt consolidation as well as debt settlement programs. With his advice many are now living a debt free life. You can reach me at: kevin.craig672(at)gmail(dot)com.
In the present society, overindulgence and overspending has become a major problem. Due to this, a lot of people are drowned in a sea of debt incapable of keeping their heads above water. Unluckily, children learn by seeing how their parents act. Consequently, they learn poor spending habits that will probably remain with them for the rest of their lives. Nevertheless, there are certain things that parents may do to ensure that they don’t implant the bad habit of extravagance in their offspring. Educating children on how to respect money is the primary step in this procedure.
Make them conscious of the price of things
A child can know the value money only if he or she is familiar with the costs of things. Whenever you go for shopping, take your child along with you. Show them various things that they are interested in, and discuss with them the expenses of each of those objects. Also make them understand the procedure of saving cash, and that parents don’t possess an unrestrained supply of money. Kids have a tendency of thinking that cash is unlimited and that they may get as much as they want from the ATM. From the very childhood, you must give your child a rough idea about budgeting. They need to understand that there is a limited supply of money and they cannot spend anything beyond their resources. As they grow, they’ll gradually come to understand what budgeting is all about. This will aid them in developing a better respect for the concept of saving money.
Teach costs of other objects
While you discuss the costs of toys and stuffs that your child is interested in, also try to give them an idea about the prices of daily items. These include clothes, groceries, health and beauty items, etc. This will aid them in comparing the costs in a better way and get a rough idea about the price of the new video system that they are absorbed in. When they see that the cost of their new video game is equal to the cost of groceries for two weeks, they will be probably hesitant to ask for costly items. Even though they do ask, they’ll be able to analyze the reason when you say no.
Teach them to save
Implement in your child the habit of saving cash. Help them save some money in their piggy store or savings account in case they have one. Whenever they wish to buy something allow them to spend their own funds. Once they start seeing their own cash dwindle, they’ll probably be more cautious while spending. As they start inculcating the habit of saving, they’ll have tougher time spending cash flippantly when they get older.
Encourage your kid to save cash
Support your child and guide him on how to save money every month. You could motivate him by presenting him with a nice and interesting piggy bank. You may also give your child a musical piggy bank to aid him gain interest in savings. Give him some extra cash for his savings. For example, present him $8 for every $25 saved. Once they start receiving the extra cash, they’ll comprehend the concept of earning interest on their funds.
As your kid grows up, you may begin a college investment plan for them in order to continue with their education. For adults, after school jobs might be a great option for earning cash and tutoring them to value it.