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7 Ways To Teach Your Spoiled Child About Money Management

7 Ways To Teach Your Spoiled Child About Money Management

If you’re counting on the public school system to teach your children about money management, prepare to be disappointed. There is only one person with the power to turn your spoiled child into a fiscally responsible adult: you. Here are seven tips that might help.

1. Don’t tie allowance into every single chore—

Household chores should be done without expectation of payment. Tying your child’s allowance into the simple act of cleaning house is a sure-fire way to raise your child to become a messy adult with a home so disgusting that no one would ever want to visit. Instead, explain why a clean house is a nice thing to have. You could say something like:

“I know mopping floors and cleaning counters might not be exciting, but we need to clean up once a week, because it is easier to have fun and relax when there are less messes to worry about. Also, if we don’t take care of the kitchen, bugs could get to our food, and isn’t that gross? It would make me feel really good if you helped me take care of that.”

2. —but offer incentive for tackling challenging tasks.

While you shouldn’t bribe your kids to do chores (something they should do for no financial reward), you should offer incentive for tackling projects that require more time and initiative. You could set a flat-fee for more complicated tasks like mowing the yard, organizing the closet, and boxing up unneeded clothes and toys for a yard sale or charity drive. Feel free to take this a step farther by encouraging your child to open their own lemonade stand or yard-work business. You’d be smart to teach them how to market themselves at a young age, because a college degree doesn’t guarantee a good job in today’s economy.

3. Draw a diagram to illustrate your family’s priorities.

It’s difficult to explain fiscal responsibility to children in words that they will comprehend, so why not draw a diagram to illustrate fiscal responsibilities in a way they can understand? You don’t need to be a Michelangelo or Donatello; just draw an inverted triangle like this:

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inverted-triangle

    Then list your expenses in the order of their priority like so:

    • Shelter (rent/mortgage)
    • Food, clothes, and other groceries
    • Utilities (heat/air conditioning, electricity, water, phone, Internet)
    • Savings/Investments (emergency expenses like doctor visits, long-term investments like vacations to theme parks and beaches)
    • Charity/Giving (helping those who are less fortunate)
    • Wants (ice cream, toys, movie tickets, video games)

    While it’s okay to spend money on things your child would like to have, you need to make sure they understand the key difference between “needs” and “wants.” Using the inverted triangle as an illustration, explain that your family has an awful lot of needs that must be met before you’re able to consider your child’s individual wants. Repeat this lesson as often as necessary, because it’s vital for your child’s long-term financial success.

    4. Use three separate piggy banks: saving, giving, and spending.

    This tip is repeated often enough to be obvious, but it’s obvious because it works. Get three piggy banks (or anything else childlike that money can be stored in), label them as listed above, and set a percentage for each category like so:

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    • Saving = 50%
    • Giving = 20%
    • Spending = 30%

    I’m not suggesting you must use those percentage points listed above; see them as a general suggestion, not a strict guideline. Set them in your own way that fits your personal beliefs about how money should be spent, and/or what you feel would be most beneficial to your child.

    5. When appropriate, turn those piggy banks into interest-earning savings accounts.

    Children seem to learn better visually at a young age, so I’d recommend using the piggy bank approach until they are old enough to grasp the concept of “interest-earning savings accounts.” When you feel they’re ready, take them to the bank to open their first savings account. Make sure you explain why this is a good thing for them to do by saying something like:

    “I’m so happy and proud of you for saving (Insert Dollar Amount Here)! But now we’re going to put that money in a credit union, because they will pay you a little bit extra just for being smart enough to save your money.”

    Share a bank statement with them quarterly and make a big deal out of how well they are doing by pointing out how many dollars they made in dividend, and exclaim, “Wow! If you made that much with the x-dollars you put in there, I wonder how much you can make if you invested y-more-dollars every time you get paid your allowance?”

    6. A thoughtful gift is better than an expensive one.

    Have you ever really watched your child while they open presents during Christmas or their birthday? If they are ripping away wrapping so rapidly that they don’t even take a moment to react to each individual gift before moving on to the next one, you might have a spoiled child who doesn’t appreciate anything. If you don’t think thoughtful gifts are better than expensive ones, please recall a baby (yours or otherwise) who you’ve seen open an expensive toy, only to find the box it came in much more fun to play with than the toy itself. Materialistic stuff never made anybody happy, so stop buying your child every shiny, new thing under the sun, and start focusing on more frugal (but thoughtful) ways to express your love.

    7. Use grocery shopping to illustrate buying for value.

    Just in case you weren’t aware, there isn’t typically any difference between name-brand labels like Green Giant green beans and the generic variety offered by your grocery store. Use this opportunity to teach your children how to shop for value. Present them with two identical groceries—for example, an expensive name-brand jar of peanut butter and a more affordable generic variety—and ask them which one sounds like it would be a better deal. For bonus points, use this exercise while they are learning basic math, because they will find the subject more interesting (or at least less boring) when they understand how it applies to their life.

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    For a list of cheap and healthy foods, grocery savings tips, and a full-length shopping list you can print and take to the store or download to your phone, click here.

    It’s easy to end up with a spoiled child who doesn’t appreciate anything if you let them have everything they want. Follow these seven tips to raise your child in a positive way that helps them become a fiscally responsible adult.

    Are there any extra tips you would add to this list?

    Feel free to pass this article along to any parents you know who might be helped by it!

    More by this author

    Daniel Wallen

    Daniel is a writer who focuses on blogging about happiness and motivation at Lifehack.

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    Published on November 11, 2020

    10 Best Ways to Save Money Faster and Smarter

    10 Best Ways to Save Money Faster and Smarter

    People love to talk about budgeting, reducing spending. and investing. But unfortunately, talk is cheap, and poor money management is expensive. It’s easy to talk about the best way to save money, but putting it into practice is a different thing.

    What people need to talk about is the practical and efficient ways you can quickly save money to accomplish your goals. After all, they don’t teach this stuff in school.

    Here are the 10 best ways to save money faster and smarter.

    1. Cancel All Your Subscriptions

    Yes, all of them.

    Okay, you can keep your wifi and trash. But other than that, cancel all your monthly subscriptions for one month. You will survive, I promise. Better yet, you will realize you won’t miss all of them.

    Now that you have had 30 days to examine what you really missed and what you never thought twice about, you can add some of them back in. The others? you never have to think about them again.

    This is something you can and should do with every part of your life. If it’s clutter, cancel it. Being able to step back and see what is cluttering your life and what is excelling your forward helps improve your quality of life and financial standing.

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    2. Automate Savings From Your Paycheck

    Many of us are so excited about getting a new job that we rush through the paperwork during the hiring process. Good news for you, I have had lots of jobs so I have seen it a million times.

    There is an option for a portion of your paycheck to go directly into a secondary savings account. This is by far the most effective way to save money every month. We tend to spend most of what we have. So, if we take it off the top first, then it’s less likely to be spent. Just head over to HR and ask. It will only take two minutes.

    3. Cancel the Happy Hours for the Rest of the Pandemic

    We are in the middle of a global pandemic, which means that there is no better time to buy some drinks from the local store and stop shelling out $5 a drink at the local cocktail bar. When we look back at our bank statements, we are always shocked that fast food and alcohol can add up so quickly. You can easily save a couple of hundred dollars just by taking this step.

    A great exercise is to print out your last bank statement and highlight all the areas of alcohol and fast food. The amount may surprise you and make you think twice about that old fashion.

    4. Online Grocery Shopping

    Some people think online shopping increases the amount they spend. For the most part, I would agree—except for this category.

    Online grocery shopping is now a no-brainer, though. Whenever you walk through a grocery store, two things always happen: you always grab impulse items, and you never know the total of your cart until you checkout. This means that we always spend more than we originally planned.

    With online shopping, you can see your total as you add items to your cart. You are way less inclined to make those impulse purchases and because of that, I would venture to say that you could even pay to have them delivered to your door and still save money each month by choosing online grocery shopping.

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    5. Get a Famzoo Debit Card

    This is something my wife and I swear by, and it’s great for the entire family! Famzoo strictly exists to help families and kids budget their money better. Each month, my wife and I have an allotted amount loaded onto our pre-paid Famzoo debit card. This amount has changed every year depending on promotions, kids, stage of life, etc.

    The important part is that when you give yourself the freedom to spend a certain amount, you are more likely to only spend the allotted amount. Think of it as a diet. If you are counting calories, you are more likely to stick close to the amount you set. You can also look for some tips online to better stick to your family budget.

    6. Purge

    This is actually my favorite to do, and it is actually one of the best ways to save money. Raise your hand if you have ever moved. Okay, so everyone.

    When we move, we are always amazed at how much junk we have acquired. I have found that about every 6 months, I can find a couple of boxes to sell online of things that we never use. This not only gives you so extra quick cash, but it also keeps your house more tidy and organized.

    Now, go clean out that garage!

    7. Amazon Subscribe and Save

    32! That is how many items I have setup on amazon subscribe and save. Let me explain.

    This sounds expensive, I know. But it actually saves us hundreds of dollars per year! We all need toothpaste, shampoo, razors, laundry detergent, toilet paper right? This feature is truly a triple threat. When you have more than 5 items on subscribe and save, you automatically unlock the max savings for every product on your list. This can be up to 20% per item!

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    Now, even better is that it ships straight to your door on the exact day you want the item, maybe monthly or maybe you only need it every 4 months. This way, you never have too much or never run out. Either way, it’s totally customizable.

    Lastly, there is no contract for any items, which means you can switch brands or items at any given time at no cost. My advice: every single staple item should be on your subscribe and save.

    8. Rewards

    This may ruffle some feathers, but if you are using your debit card for purchases, you are missing out on free money! We have this notion that credit cards are evil but in reality, they are the same piece of plastic as your debit card.

    How you use it can be bad, don’t get me wrong. But if you want my opinion though, ditch the debit card and get a rewards credit card. Use it just like you would your debit card and make sure to pay it off as soon as the statement comes in!

    Just to give you an idea of how powerful this can be in terms of money, here are some things that our miles have paid for:

    • 4 nights in Vail with Flight
    • Rental car in Vail (convertible might I add)
    • Flight to Ireland
    • Flight to Hawaii
    • Multiple staycations at very nice Hotels

    That’s roughly about 7 thousand dollars in travel expenses so far! Remember that the credit card is just a tool and can be one that benefits you if you use it wisely. Ironically, this can be an effective way to save money.

    Pro tip: If you don’t trust yourself carrying around a credit card, then set up all your monthly bills with your credit and leave it in a drawer at home. This way, you rack up miles but don’t get tempted to overspend.

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    9. Vacation With Friends

    Now, I know travel is hard right now but what a perfect time to go grab an Airbnb in the woods with a couple of friends and detox from the world right now!

    Vacationing alone can be pricey and get rather boring quickly, but if you split lodging and set out for a road trip, it can become affordable quickly! For a couple of hundred bucks apiece, you can have one of the most relaxing vacations ever. Don’t forget to pick up your food at the local grocery store to avoid eating out every meal!

    10. Make a Budget

    When is the last time you updated your budget or made one for that matter? Making a budget is like writing down your goals. If you don’t make a budget, then you will struggle to save.

    How can you know if you are spending wisely if you are not tracking everything?

    Our advice would be to get a finance app like Mint, Every dollar, or personal capital. All these apps are free and do a tremendous job of tracking spending and budgeting. I still am old-school and have an excel spreadsheet which I do highly recommend.

    Work Smarter, Not Harder

    The entire goal is to boost your bank account while reducing the effort required. Efficiency is the name of the game, and automation is the key player. Luckily, we live in a world that has more perks than we can ever take advantage of. But if I were to choose a few, it would be the ones above.

    Taking on all 10 of these steps may seem a little daunting. You can first try to pick three of your favorite and start there. Saving money doesn’t have to be a chore as long. As we use the tools correctly, it can be quite effortless. And now, you have a great blueprint to get started!

    More Tips on Saving Money

    Featured photo credit: Sharon McCutcheon via unsplash.com

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