Much of the population often doesn’t learn about proper money and budgeting habits until their college years. By then, it’s often not soon enough to save them from a few budgeting mistakes.
The key to proper saving and money management is starting early in life. That being the case, it’s never too soon to start your child off on the right financial path. Instead of waiting until they’re ready to graduate, follow these four ways to teach your child how to budget.
1. Provide an Allowance
Until your children are of the age to get a job, providing them with an allowance can be a great way to teach them how to budget. An allowance gives your child a steady flow of money every week or two weeks, just like a real-world salary.
They are then posed with the task of managing and deciding whether they spend that money or save it, and shows them how to make that money last until they receive that next allowance.
2. Consider Using Three Jars
The idea behind the three jars is that you give your child a spending jar, a saving jar, and a sharing jar. Your child is then given the power to divide up their allowance however they choose between the three jars.
They decide what they spend immediately, what they save for future purchases, and what they donate.
Make the three-jar exercise fun by giving them something tangible like a picture or sticker to look at to remind them of what they’re putting their money towards. Have them record the amount in each jar, what they’re putting it towards, and how much they need for their goals. And like with most things regarding your kids, feel free to give your child appropriate guidelines when needed.
3. Think of the Small Lessons You Can Teach
While utilizing the three jars, be sure to use the exercise as an opportunity to teach your children valuable money lessons. Show them how putting their money towards savings now could provide them with the means to purchase something more significant and meaningful in the future.
Furthermore, teach them how to prioritize their spending and wants, since you’ll never be able to buy everything you want in the moment. Simply teach your kids the power of money and the significance of budgeting.
4. Include Them in Planning
The last great way to teach your kids about budgeting is to be sure to include them in on your planning once they’re of appropriate age. By demonstrating for your kids how you budget, plan, and make financial decisions, you give them an example to look up to and help them understand your thinking in financial decisions as well, so that they may know how to approach their own finances in the future.
It may seem like you have all the time in the world to teach your child how to budget. And in a sense, you do, however, the sooner you teach them the value of money and budgeting, the more you set them up for success in the future.
At what age do you feel it’s appropriate to teach your child how to budget?- Kayla