Your bundle of joy is now in primary school and asks for a brand new smart phone.
As great as a new gift is to motivate a children, teaching them the value of money, how to earn it and spend it, is an even greater gift. This will teach them how to earn and save money to afford things they want, when they want them.
Children in this age group are only just becoming aware of the concept of money, the earlier you begin to teach them, the better their understanding will be.
Here are some tips on how to pass on money management habits to your child - Set goals Help them make a list of all the goals they want to achieve together, allocate the time and cost of each goal. Nothing is too extreme to include in this list, the aim is to teach them that getting anything takes time and has a cost.
- “Employ” your child Identify jobs around the house that your child can do to earn extra money from you. It could be cleaning their room, washing their plates, folding clothes properly etc.
- Budgeting skills Create a simple budget for your little one. You can allocate weekly income forspending, saving, sharing and investing. It is important that you help them stick to a budget as it will help them build good money habits.
- The difference between wages and a salary Wages are usually paid weekly are typically based on a per hour rate. Wage earners don’t get paid vacation and they have to give up pay for leaving early, coming in late or missing a day’s work. A salary is calculated annually and divided by the number of payments received in that year. Salaried workers often have paid vacations and are still paid if they are late or leave early from time to time.
- Help them delay gratificationHelp your child understand that saving some money is good and can improve their overall financial well-being. When your child wants an expensive item, a video game or trendy doll, they can contribute towards paying for it by saving some money daily.
You can also help them start this practice early in life by opening a savings account. To find out more about Stanbic IBTC savings account, click here http://bit.ly/1dWGhMS.
Do you have any more useful tips? Share your helpful savings tip with us on Twitter @StanbicIBTC or Facebook: fb.com/StanbicIBTC