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8 Tips for Raising Moneysmart Kids

8 Tips for Raising Moneysmart Kids

    Ask your children to list down all the things they could do if they get a $50 or $100 bill for a day. You will be amazed by the answers. Even though you might have never talked to your kids about smart spending, kids figure out a way to set their priorities when it comes to spending their money.

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    But while kids know their priorities (candies! Toys! Computer games!) as consumers that doesn’t mean that they’re wise spenders. So, if you have been postponing the money management talk with your kids all this while, this is the right moment to teach them about personal finance.

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    There are many ways to break the ice and discuss money without causing your child to lose interest or perceive the topic as boring. Here are eight pointers on how to instill good spending habits in your child that would last for a lifetime:

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    1. Listen to your child
      Refrain from criticizing or chiding your kid for overspending or making the wrong buying decisions. Instead of scolding or arguing, you can make your point in an interesting way such as giving examples of a better deal or a better quality product that you have heard about from a friend or an advertisement. Ask your child’s opinion on such information and take the flow of the conversation towards proving your point with patience.
    2. Let your child “earn” it
      Instead of handing over the allowance as a dutiful parent, make your child earn it. The tasks don’t necessarily have to be boring. You can hand over a combination of interesting and slightly uninteresting chores. For instance, you can ask your kid to prepare a list of her favorite songs for the weekend party, cleaning the garage and pepping it up with her very own ideas.
    3. Give a modest allowance and stick to it
      Regardless of your financial status, the allowance for your kid should always be at par with the average allowance of the other kids at school. This would avoid rash spending habits and showoff or inferiority complexes in your child.
    4. Go interactive
      There are many applications designed specifically for school age kids that can help them manage their personal finance. Some of them are quite educational and interactive. You can either buy these applications or even download some of them for free.
    5. Be a role model
      Parents are the kids’ first teachers. To teach good spending habits and money discipline in your child, you need to introduce those habits to yourself. By working on your own money management and personal finance skills, you can set a great example for your kid to watch and learn on a daily basis.
    6. Shop smart
      Go shopping with your kids. Get them to prepare the shopping list and make sure they understand that you will stick to it unless you have to buy something absolutely essential. Such discipline would help your kid avoid the habit of spending on unnecessary items just because they ‘feel like it’.
    7. Teach about social responsibility
      Teach your kids about the importance of money, social responsibility and setting their priorities. For example, your child must understand that donating a dollar to the homeless charity is more important than spending it on unhealthy sugar candy.
    8. Buy a piggy bank
      Keep a cute piggy bank or a fake fancy vault in your kids’ room which would encourage them to save a portion of their allowance and gift money on a regular basis. Discuss the target amount to be saved for the ‘grand spending spree’ by the end of a certain period of time. For example, your kid can buy that new Barbie set or a shiny soccer ball by saving a portion of her allowance for a couple of months.

    Teaching your children about financial responsibility is a way to ensure their future. It’s one skill that they will treasure and give them a better life.

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    Last Updated on April 3, 2019

    How to Nix Your Credit Card Debt in Less Than 3 Years

    How to Nix Your Credit Card Debt in Less Than 3 Years

    Debt is never a fun thing to be in. But, there are many actions that you can take that will help you rid yourself of the burden of debt once and for all.

    By coming up with a set plan, eliminating your debt can feel much easier than constantly thinking about it.

    This post will provide some tips on how you can do this to help you nix your credit card debt in less than 3 years.

    Hint: there are ways that are easier than you think.

    1. Consider Consolidating Multiple Credit Cards If Possible

    This may not be applicable to you, but if you have multiple cards – it is something to consider. Keeping up with multiple bills is time consuming.

    It will depend on the balance you have on each. Consolidate ones you can but do not do it to the point that you get too close to the maximum limit. Also, it is ideal to pick the card with the lower interest rate.

    Consider if there are any fees or alternatively, rewards, with transferring a balance to another card. Watch out for fees. Note that some cards offer rewards for transferring a balance to them. This is extra cash that can help go towards paying off your debt.

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    Having one or two cards can make nixing your debt much simpler than keeping up with the balance of a bunch of cards. Keeping track of paying the minimum towards a bunch of cards is time consuming. Spend the time to consolidate instead to make the overall process simpler going forward.

    My tip: Have one main credit card. Have a second one that you use for necessities – such as groceries or gas – that offers rewards for those purchases (a lot of cards do) and set the second one on auto-pay. You should be able to pay off a smaller amount on auto-pay if it is a necessity. If you think you cannot, then you may need to cut down a lot on expenses.

    Why do I suggest doing this? Having one thing set to auto-pay is one less thing to think about. One less thing to waste time on. Same idea with consolidating to one main card. Tracking down too many is a hassle.

    2. Try to Pay the Full Balance You Spent Each Month at the Very Least

    You need to pay off the amount you are spending each month when that bill comes in. This is the amount you spent THAT month.

    Do not let the debt keep accruing while you work on paying any unpaid debt that has accrued. It will become a never-ending battle. Try as best as you can to be current on paying for each month’s expenses when that month’s bill comes out.

    If this is a strain, consider why. You may need to cut expenses. Or you may need to consider other cards. Or look at where this money is going.

    3. Pay Extra When You Can – Every Small Amount Counts

    This cannot be emphasized enough. If you are looking at a lot of credit card debt, it can look daunting, but each extra amount that you can put towards the debt will really add up – no matter how small it is.

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    It does not just reduce the principal amount that you have left to pay off, but it reduces the amount that is collecting interest. You will always save money with that reduced interest.

    4. Create a Plan on How to Pay Extra

    Back to the main point, having this plan is giving you one less thing to think about.

    This plan should be a plan that works for you. If it does not work for you, your spending habits, and your views on debt, then it will not be an effective plan.

    For instance, if a set plan of an extra $50 (or another amount that you know you can afford) works for you, then do that. Set that aside every month and pay that extra amount. Treat it like a bill. Choose an amount that works for you and pay it like clockwork as though it was a bill you had to pay each month.

    Little amounts will not nix it entirely, but they will help tackle it and having a set plan can make it less of a chore. Creating a new plan of how much to put towards it each month is an unnecessary added stress.

    5. Cut out Costs for Services You Do Not Use

    If you are signed up for subscriptions that you do not use because of some free trial or for some other reason, cut it out. Your overall financial position will look better.

    In turn, that will make cutting your credit card debt easier. Look at your statements to find these expenses. If you do not use them, you may forget you are paying some unnecessary amount each month. Cutting it out can really add up in savings that you can put towards other needed expenses.

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    6. Get Aggressive About It

    Consider these points:

    Depending on the interest and the level of debt, you may need to give up a few indulgences. For example, instead of ordering delivery or going out to eat, cook at home. Everything adds up.

    Other things may be more of a sacrifice. It may be a trip you wanted to go on, or a daily latte habit you’ve picked up. In these instances, consider how important it is to you and if it’s worth the sacrifice. And if it is a costly expense, think whether you can wait to indulge.

    Cutting an extravagant expense can really help make a dent in your overall debt. Try not to add to debt when you are trying to pay it off. It will be a never-ending battle. Make it less of a battle with these tips and it will feel easier.

    Bottom line: Do what you can to make this process easier for you. Implement steps that do this. It takes time now, but will help overall. Also, keep track of your spending and paying down of your debts. Which is the next point.

    7. Reevaluate Your Progress at Set Intervals

    Doing a regular check-in can help you see your efforts pay off or maybe indicate that you need to give this a bit more effort. If you check every 3-6 months, it will not feel so much like a chore or feel so daunting.

    By doing this, you will be able to better understand your progress and perhaps readjust your plan. Bonus: if you see it pay off, it will feel great to do this check-in. You will get there.

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    Finally (and most importantly)…

    8. Keep Trying

    Do not get discouraged. Pushing it off will make it worse. Just keep trying.

    Once your debt becomes lower, each monthly payment will reduce the balance more. Why? You are paying less towards interest. It will be a snowball effect eventually and it will become much easier to manage. Just get to that point. And know once you do, it will feel easier and motivating.

    Start Knocking out Your Debt Today

    The best way to eliminate debt is to get started right away. Begin by implementing the above steps and watch your debt just melt away. Try out some of the above strategies and see what works best for you. Soon you’ll be on your way to a debt free life.

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    Featured photo credit: Pexels via pexels.com

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