Understanding the value of money is an important tool that can be used to help create a comfortable, successful life. What parent doesn’t want that for their child? The good news is that you can begin to build the foundation for financial success early in life by teaching them about budgeting.
Let Them Earn Money
While children in the U.K. aren’t allowed to work full-time jobs until they’re 16, and can only work limited hours after turning 13, according to NiDirect, they can still learn about earning money before then. Since you are their parent and not their employer, you could choose to pay them for doing chores around the house. Allowing them to get jobs when they are old enough is another option. Having the opportunity to earn money teaches them about having an income and what it means to work for what you earn.
Teach Them About Cost
The other half of the equation when it comes to budgeting is expenses. Children don’t often have much of a concept for how much things cost, especially when they are younger. £5 can be a lot of money to a young child, but it may not be anything you would think twice about. You can start to build that understanding by helping them identify expenses and doing the math to figure out how it all adds up. According to Derek Moneyberg, accounting for expenses is a vital part of understanding where the money goes and how well you’re staying in line with your budget.
Learning to Save
One of the things budgeting does is that it gives you the tools to track your money so you can manipulate it and build up savings. According to Our Daily Mess, because it takes children time to learn the concept of delayed gratification, learning to save can be challenging. Help your children compare their earnings to the cost of things they want. If they don’t have enough money to pay for something, you can use that as an opportunity to show them that by setting aside a portion of the money they earn, after a while they’ll be able to pay for the thing they want. Help them calculate how long it will take them to save up for that item. You might be surprised by how excited they become about saving.
By teaching your children about budgeting from a young age, you instill in them the lessons they’ll need to successfully manage it later in life when the stakes are much higher. Start by letting them earn money, teaching them about cost, and helping them learn how to save. These concepts will serve them well long after they’ve left your home and started one of their own.
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