Money resolutions to make with your children

December 31, 2013

Here are some ways you can save with your children.

 

By Michelle Brohier
When it comes to the New Year, everyone is eager to start it off with resolutions to improve themselves throughout the year. The most common are: getting healthier, starting a new project or getting financially fitter.

For those with children, New Year resolutions doesn’t have to be limited to having your children make sure they keep their room clean or behave themselves: why not teach them to manage money?

Making a resolution to manage money better together with a child will not only force you to make the right money moves in order to set a good example; but will also teach young children the importance of being prudent from the get-go. The tag-team concept will also keep both of you in check!

Here are some ways you can save with your children.
Start saving
Everyone needs savings and you can teach your child how to save up for items and experiences they want. Set up a junior savings account for your children where they can keep the money they receive during festivities, birthdays or even money saved from their allowance. Bring them to the bank and show them how the money is deposited and let them watch the account grow. The satisfaction they gain will hopefully curb high spending tendencies!

Lead by example: Take this chance to save money in your own savings account too. Show your children that you are also working hard to save for the future just like them, and this will encourage them to keep at it too.

Set up different piggy banks
Children may still want some money for little treats that are easily accessible. The mad money jar is a concept both children and adults can utilise to fund small indulgences every now and again. Set up a jar or a piggy bank in their room for them to dunk in spare change and small savings. Allow them to label the jars with removable sticky notes based on what they are saving up for. They can even stick pictures to motivate themselves. The visual reminder of the item will encourage them to practice prudence in order to get it.

Lead by Example: Set up your own jar for your little indulgences. Of course, instead of coins, you will probably have larger notes for those nice dinners, spa treats or shopping. ‘Mad money’ jars allow you indulgence without the guilt.



Give them spending experience
It’s important to teach children how to control the money that they have. When you go out for shopping, show them the cost of the items spent and how much the total is to put food on the table and buy them their treats. Allow them to participate by giving them a budget and asking them to choose their favourite foods within the budget. This will teach them how much things cost and if they want the sugared cereal, they may have to forego the chocolate bar. It also makes them more appreciative of the food they are given at home.

Lead by Example: Keep track of your own finances and see where you can cut corners to bring down your grocery and other bills.

Teach the difference between needs and wants
Children need to know the difference between a need and a want. Just because they want something, it does not mean they should have it. Discuss the item with them and what they intend to do with it. It’s not about making the decision for your child but leading them to make the right choice themselves.

Lead by Example: Show your child you practice what you preach. It’s pointless to tell him/her that the new toy is unnecessary whilst you buy more gadgets or designer items for yourself.

Earn through the little ways
Give your children the opportunity to earn their own money. Give them chores around the house and offer a token sum if it’s done well. Do not, however, reward them for things they must do (such as study or go to tuition class) as this will make them assume that even necessary behaviour is rewarded.

Earning this way will teach them that money can come through effort, hard work and some amount of skill.

Lead by Example: Are there more ways you could be earning more? How about a part-time job or consultancy work? If it doesn’t go against your current employment contract; you can offer to freelance too.

Money management is a life skill best learnt early. Embarking on a new year of better financial management with your children can be satisfying and useful. Make the best out of the New Year and have a great 2014!

This was brought you by MICHELLE BROHIER from RinggitPlus.com. RinggitPlus compares credit cards, personal loans and home loans to help Malaysians get more for their money.