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Money Management Skills and Your Child
Money is one of the most useful tools known to man, and yet one of the tools which many of us have not learnt to use well.
There are countless stories about millionaires who have lost all their money because they were simply not taught how to value, use, and manage their money wisely. How to spend and save money prudently must be taught, and like every other skills, must be practised for mastery.
So the question is, when and where should a child be taught how to use money wisely? I think it should be taught at home; and it should be taught to kids as early as possible. How early is early you may ask? A child should be taught how to manage money as soon as they are able to recognize and count money. By this I mean, a child is ready for his first lesson in money management when he starts to ask you for money.
Looking back at my early childhood days, I must confess that I was never taught how to use money. I just learnt along the way some money management skills. I did a Finance course in college, that was mostly theory. Only a small fraction of that course involved budgeting and saving. My parents did their best to manage the money that they had, but did not know how to teach their children how to manage money wisely. They were able to get by the trial and error method. Thanks goodness my sisters and brother who taught me some good money management skills.
So in retrospect, I think today I would be better managing my money if I was taught at an early age some of the key principles in managing money wisely. It is often said that experience teaches wisdom;. so from my years of experience and studies, I would like to make the following recommendations to parents about how to help their kids to manage money:
1. Teach your child how to value money.
Some parents find it difficult to say “no” to their children when they ask for anything. and some parents have developed the habit of giving their kids everything they ask for. If you are that kind of parent, I would recommend that you allow your children to do something to earn the allowance that you give to them . By allowing them to do little chores around the house before you give them their allowance you are teaching them to value the money that they receive. Nothing comes easy!
2. Teach your child how to save.
If you give your children an allowance teach them how to save a percentage of it(no matter how small it might be); and not to spend all of it. Whether you want to open a saving account at a bank or invest this money for your child, is totally up to you. . Whatsoever your decision regarding saving money for your child is, it can only benefit your child in the long run.
3. Teach your child how to budget
Let them make a list of the things they want to spend their money on, and teach them how to allot proportionally an amount of money to each item based on importance from the amount of money that they receive. You are teaching them the important lesson of living and spending within their means. You should only spend what you are able to afford.
4. Teach you child to give
Giving is such an important part of learning how to manage money wisely; included in the child’s budget should be a column for giving. Teach your child that it is more blessed to give than to receive. Show them how important it is to give to charitable organizations.
5. Teach your child to tithe
Tithing is one of the ways for you to be blessed by God. There is a special blessing that is promised to all those who tithe (Malachi 3:10), so teach them the importance of giving 10% of what they receive to God ( a local Church). No amount is too small!
While these recommendations will not guarantee your kids a great deal of wealth later in their lives, it will surely help them to grow up learning how to invest and manage their money wisely.
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