Ways to teach children how to budget their money

Family budgeting/ iStock

It’s never too early to teach your children about money.

According to Beth Kobliner, author of ‘Get a Financial Life: Personal Finance in Your Twenties and Thirties’, children as young as three years old should be taught how to use money.

Speaking to Forbes, Kobliner said: “The sooner parents start taking advantage of everyday teachable money moments (for example, give a six-year-old $2 and let her choose which fruit to buy), the better off our kids will be. Parents are the number one influence on their children’s financial behaviors, so it’s up to us to raise a generation of mindful consumers, investors, savers, and givers.”

But like most things in life, this may be easier said than done for some parents.

So below we look at ways in which this can be implemented…

ALSO READ: Saving for your child’s education

Give them pocket money

One of the best ways to start teaching your children about saving and spending money is through pocket money. Just let them know for how long it’s supposed to sustain them for, and they have the freedom to choose whatever they want to buy. For instance, if you can start them off with enough for a week, then as soon as they master the week, give them more and tell them it’s for a month. However, let them know they can’t come to you if they misuse their money and run short before the end of the period.

Include them when budgeting

Let your children sit with you when you budget, so they can see just how much things cost. This will teach them how valuable money is and how expensive things really are.

Create three jars, labeled “Saving”, “Spending”, and “Sharing”

One of the lessons shared by Kobliner on Forbes is creating three jars and letting your children use each of them every time they get money. This will teach them that money is not only for spending on themselves, but can be used to buy someone else a gift or for investing.

Below, Susan Beacham of Money Savvy Generation shares “Five Tips to Teach Your Kids About Money”.

Image courtesy of iStock/Rawpixel