Overspending is a major problem in today’s society. Because of this, people are plagued with loads of debt that they can’t keep their heads above water. Unfortunately, children learn by watching what their parents do. As a result, they are learning bad habits that will continue this trend. Fortunately, however, there are things parents can do to ensure they don’t instill the bad habit of overspending in their children. Teaching children to respect money is the first step in this process.
Make Them Conscious of the Cost of Things
One of the best ways to teach a child to value money is by familiarizing him with the costs of items. As you shop, show your children the various items that interest them and talk to them about the costs of each of those items. Also help them understand the process of saving money and that parents do not have an unlimited supply of money.
Children tend to think that money is unlimited and that the ATM will give you everything you want. The more you help them explain budgets and that there is a limited amount of money to spend, the better understanding they will gain over time. This will help them develop a greater respect for the idea of saving money.
Show costs of other items
When you discuss the price of toys and things your children are interested in, it would also be a good idea to give them the costs of everyday items. These include groceries, health and beauty items, clothing, etc. This will help them better compare costs and get an idea of how much the sacrifice will be for the new video game system they are interested in.
They may be more hesitant to order expensive items when they see that they cost the same as 2 weeks worth of groceries. Even if they ask, they will better understand why you can say no.
teach them to save
Teach your child the habit of saving money. Ask them to keep money in their piggy bank or savings account if they have one established. Whenever they want to buy something, let them spend their own money. When they start to see their money dwindle, they will be more hesitant to spend.
For whatever reason, it’s easy to spend mom or dad’s money, but when it comes to spending their money in some way, things seem quite different. As you begin to instill in them the habit of saving, it will be more difficult for them to spend money frivolously when they get older.
Encourage your child to save money
You shouldn’t just teach your child to save money. You must also motivate them to do so. You can start this by introducing a well-designed piggy bank. You can opt for musical piggy banks to help a child get interested in saving. You may also want to give them savings bonus amounts. For example, you could give them $5 for every $20 saved. This will also help them understand the principle of earning interest on their money.
As your child grows, you can introduce him to a college investment plan to support his education. For adult children, after-school jobs can also be a good way to earn money and teach them to value it.