How to teach a child from an early age to manage personal finances
Do I give pocket money to my children? At this point, almost all parents ask this question. And if given, from what age and to what extent ? Do I need to report on the amounts spent and whether to devote the child to the subtleties of the formation of the family budget ? These and other questions about the financial education of children were answered by a consultant for the preparation of educational programs in the field of financial literacy. Let’s turn to the most relevant ones.
From what age to issue pocket money
Allocate a small amount of pocket money can be already in the senior preschool age. In the modern world, this is a completely normal practice. You can give your child 50 rubles and offer to spend them under your supervision. So he can buy his own sweets and will begin to realize that you need to pay for sweets. If the amount at his disposal is not enough for an expensive toy, he will understand that money is not infinite and will have to save for certain desires.
Children develop fast enough. On the street you can see kids who can easily manage with a tablet, smartphone and other gadgets. Fast learner allows them to easily explore the world around and put new knowledge into practice. From about 6 years old, they consciously manage small amounts and are able to save.
Do not dramatically increase the amount of pocket money. You can change the amount once a year, based on the age of the child. Even if the family budget allows you to pamper a child, you do not need to give him a lot of cash. So he will not understand the value of money, will not learn to save and prioritize desires.
How often to replenish the personal savings of the child
Younger students can be given the same amount once a week. With age, the interval can be increased, bringing to 1 month. The small financier will quickly remember the regularity of replenishment of the personal budget and will begin to plan spending, relying on the terms known to him. Very much in the question of the formation of financial literacy depends on the parents. If they forget about the deadlines themselves or give out money as soon as they run out, then the child will not learn how to plan and save. Watch first of all your discipline.
Require spending report
Do not require, and be interested. It is important to speak as accurately as possible with younger family members, explaining to them the need to share information about personal spending . You will have to talk about expenses at least at the stage when their pockets are replenished from the adult budget. With the smallest, you can arrange to talk weekly about their purchases and savings. Matured children need to be given more freedom. Be interested in their expenses not from the point of view of the warden, but in a friendly way. It is impossible to completely ignore their financial flows. The older the children become, the more dangerous the money can be in their hands.
Whether to give money for assessments and housework
The question is ambiguous. Experts advise not to tie home and study responsibilities to financial incentives. Children need to understand that the school is a place for learning, and not a platform for earnings. The same applies to cleaning. All households are equally interested in a clean and comfortable home. That is, the child should participate in domestic affairs from the awareness of himself as an equal member of the family, and not for the desired addition to the piggy bank. He clearly sees that adults clean up, prepare dinner and clean the floor for free. There should be no privileges in such matters with him.
Whether to use finance as a tool of punishment
Depends on the severity of the offense and the rules adopted in your family. If punishment can not be avoided, then it is better to be monetary than physical. It is not necessary to select what is already in the bank. This will cause anger, frustration and devalue all previous merits of the child. Just do not give him the next batch of pocket money, be sure to explain the reason for such an act. But be careful! The child can guess that money can be “earned” by good behavior. And it turns out that you do not pay him for the assessment and cleaning, but pay for it to be convenient for you. Such education will not lead to anything good.
Discuss family budget with kids
Yes, but adjusted for age. Kids can make secrets talk to strangers, so you shouldn’t tell them about family savings. But you can safely talk about where the money goes . Explain what you have to spend every month: rent, taxes, loans (if any), clothes, food, medicines, etc. The child must realize that the salary of the parents is spent not only on him and entertainment, but also on other mandatory items of expenditure. This will help him in the future to form his own budget.