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Ways To Teach Your Spoiled Child About Money Management

Ways To Teach Your Spoiled Child About Money Management

Parents love their children and want to provide them with the best. However, in some cases, many parents overdo it, handling their children with kid gloves and becoming afraid to discipline them for fear of scarring them psychologically.

While many kids are smart enough to overcome this, others become spoiled children, and can eventually grow up to be spoiled adults. While spoiled children are not that big a deal, when they grow up this can become a bigger problem, as they may feel entitled to things without doing anything to earn or deserve them. However, if you teach your child sound values while they are young, they may grow up and leave such behavior behind.

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One thing you can teach your children so they can grow up to become functional adults is money management. If you can teach your child how to manage his or her money at an early age, this can become a skill, and more importantly an attitude, that they will take with them for the rest of their life.

Set Up an Allowance

Many parents agree that setting an allowance is a great way to start teaching kids about money management. By giving them a fixed weekly allowance, you can teach them about budgeting and managing their money to last until the next allowance period. Teach them the basics first, which is that they can only spend spend the money they have on hand.

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Be Firm with Allowance Amounts and Schedules

One lesson they might learn a lot from from is the consequences of using up their allowance. While it’s tempting to give your child more money when they come crying to you, you must be firm. This will teach them that the decisions they make have consequences, and that next time they will have to think carefully when deciding how to spend their money.

Set a Good Example

Some parents go with the teaching technique of, “Do as I say, not as I do,” but you can’t always rely on this philosophy because, no matter what you do, your kids are watching your every move. That said, you should try to set a good example for your little ones. If you’re teaching them to budget and they see you splurge on a pair of shoes, they might think “If Mom/Dad is doing that, it must be OK.” Also, if your child asks for a very expensive toy or gadget, don’t just say, “We can’t afford that.” Rather, you can explain to them why you can’t buy that for them, saying something like, “We can’t buy everything we want because we have to choose which things are more important to spend our money on.”

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Set Goals

If your child has a toy or treat they really want, teach them to save for the item instead of buying it outright. Setting goals are a great skill to have, not only for money management but for life in general, teaching them to become responsible for themselves.

You should include them in the bill-paying process: you can show them where the family money goes, how much things cost, and that electricity is not free. It’s not an eye-catching point, but it’s too important when it comes to proper money management to not make them aware of it.

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Even though your child may act like a spoiled brat now, it’s not too late to turn things around. By teaching them to become responsible with money, you are giving them one of the greatest gifts and lessons a parent can impart to their child. It assists our little ones hone the cleverness of earning, saving, spending, and giving. Now they can practice responsible spending and saving before they get themselves in over their head.

Featured photo credit: money manage via farm1.staticflickr.com

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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