The Kind Tips – Tips for Life, Study, Work and Entertainment – 6 Money Management Tips for Kids

6 Money Management Tips for Kids

5 Money Management Tips for Kids

Debt is becoming a common concern for many families, making it important to form good financial manner and develop healthy money management skill during young age. A lot of kids don’t understand how money and budgeting works and it is your responsibility to teach your kids about budgeting, saving for future and planning for the large purchases. If you can employ some of the following tips, it will be easier for you to set your kid on the path of making smart financial decisions just as adults do.

1. Create allowance budget.

Help your kids with setting an allowance budget and designated a fixed percentage of the allowance each week under different budgeting areas. For example, you can set 50 percent of the allowance goes into savings, 30 percent is as the fun money and the rest 20 percent goes to a gift fund. Assist your kid with the budget breakdown and give some advice to her concerning the amounts in each category. Also, give your child a container to hold the money for each portion of the budget.

2. Save for large purchases.

You can help your kid plan for purchases of large items starting with assessing the money that is available to put toward the purchase as well as how much more is needed. When she told you what she wished to buy, you and your kid can create a temporary budget area in each week’s allowance breakdown and decide together how much she is willing to put into the large purchase saving each week. Setting the timeline and asking your kid to see the saving progress can encourage her to continue saving and figuring out other ways of earning extra money.

3. Play board games.

Board games that involve money such as Monopoly, Payday and Life can give your kid the chance of learning to handle money. Such games contains decision making related with money that may help or hurt a person’s financial life, which is educational for your child and encourage her to practice counting money and understand loans.

4. Include your kid in the family budget.

In addition to her own budget plan, you should also include your child in your family budget. During your family meeting, discuss with every family member about where the money goes so that your kid will gain an appreciation for money. Also, when you are making decision for large purchases, ask for your kid’s ideas to get her involved.

5. Shopping assistant.

Make your kid as your shopping assistant when you are in grocery stores. Ask your kid to clip coupons for you and find sales on the grocery ads. Besides, when creating a shopping list, get your kid involved and let her to tell what is needed this week. During the shopping, ask your child to help you locate different items on the shopping list and calculate the running total of the money spent.

6. Set a visual reminder.

You can provide your kid with a container, an apparent one, to store their own money. The apparent container allows your kid to watch the process of money growing and she can also observe that the money is decreasing when she makes a purchase. Use the visual reminder as much as possible to encourage her for continuous saving.

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