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How Parents Can Teach Their Children How to Manage Money in 3 Ways
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How Parents Can Teach Their Children How to Manage Money in 3 Ways

Last Updated on May 31, 2022 by Parentology

With the outbreaks and closure of schools intermittently, your kids at home could have an increased amount of screen time on tv or Youtube, or probably be spending enormous amount of time on social media platforms following their peers and be amazed at their glamourous and lavish lifestyle. While wanting to have the same fabulous and expensive lives their peers may have, which is not entirely a healthy mindset to cultivate with the extra time on hand. As parents, we’d want to help achieve any goals our children have to help them live the life they want- starting by how they manage money that’s given to them and the money they will be earning on their own soon.

Dictating and making all the decisions for your teenager is definitely not the best approach, especially at this stage of your kid’s life, but there are certain parenting methods that you, as a parent, can help your kid start a journey to good money management, without sounding too badgering about it.

Good money management is an essential skill in the modern world that will be put into good use throughout your child’s life, and here are three useful ways to keep your kid on the right financial track.

 

Encourage your child to get a part-time job during the holidays

In Singapore, it’s rather common that kids will only start working part-time jobs when they’re in the tertiary age, between ages 18 to 22- which is a few years behind compared to other neighbouring countries. Getting your child into getting a part-time job at an earlier age will help your kid gain more experience in earning and saving money, and will be able to appreciate the amount of effort needed to have cash in their pockets and earn their keep.

Encourage your kid to work a part-time job to earn money and pay for the video games and toys that he or she wants. Instead of spoiling them by buying all their wants, impose a limited allowance and motivate your kid that working part-time will help him have more money, and therefore, will be able to buy more things that he or she wants.

Letting your child find a part-time job on their own can be a daunting task to do on their own, aid them by teaching where these things are usually posted; like classified ads sections in newspapers, websites for part-time jobs, or small businesses around your residential area that are looking for extra elbow grease.

Unless your child has been used to getting lavish allowances regularly, his or her part-time job payout will be the first time he or she will be receiving a good amount of money, this is a good time to also encourage your kid to save some of his earnings or even invest a portion of it, and how it will benefit him or her in the long run.

 

Let them know how much things cost

Young ones, especially around primary school age, may not know the difference in value between a $10 and a $100 bill. But as they grow older, they’ll slowly have more sense on the actual value of money.

During your child’s teenage years, these values will slowly develop on its own, this is a great opportunity to teach and guide your kid to have a better understanding of how much things cost or how much work is put in to afford stuff. As parents, during your kid’s teenage years is the perfect timing to start teaching about the value of money.

To give your child a better picture of how much things cost, you can start with costs your kid can see and appreciate, like household bills, food, and mobile data charges. Encourage and explain to your child the value of saving and investing money and that these actions will eventually help their parents and themselves to retire and live better lives.

Openly discussing the cost of basic necessities like food, shelter, utilities, and education can help your child understand and appreciate money and how it is earned more. You can even discuss how tuition fees differ from school to school, especially in the tertiary level, go give your child a better grasp on how to approach this crucial point before becoming a full grown adult. By discussing these things to your child at an early stage, your kid, once he or she starts working full-time, will have a more practical approach to money management.

 

Get them started on their first investment!

The best time for parents to teach their children about the benefits of investing is during their teenage years. Giving them a head start in this field can benefit you and them in the long run.

Help your child get into his first investment using the money earned from his or her part-time job or even the money gained from generous family members through ang bao and other cash gifts. It doesn’t need to be a large amount of money, the important thing here is letting your kid experience first-hand how to invest. Let your child be the judge on what to invest on and how much he or she is willing to put in and watch how much that investment will flourish over time.

Your child’s first investment doesn’t have to be high-risk, high-yielding, or flashy either. For the sake of getting first-hand experience in investing, something safe and easy to monitor, like a savings bond, is a good place to start. Once your child has made the investment, regularly monitor it with your kid and let him or her experience the satisfaction of investing and seeing hard-earned money grow.

People who have started investing early in their teens have a sharp sense of the importance of investing early and regularly. This is a habit that they’ll carry over very well as they turn into adults and will have a big head start in terms of financial stability in their 20’s and 30’s compared to their peers who have not yet gone into investing.

The important thing to have here is letting your child experience and appreciate managing money in a more responsible way. Sure, your child’s first investment may look insignificant in terms of monetary value, but the lessons your child will learn during this process is priceless.

 

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