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Teach your child good money habits

image 482There is a popular saying that goes, “People buy things they don't need, with money they don't have, to impress people they don't like.” With economies around the world in crisis, and people all over the world drowning in debt , it is fundamentally important to teach our children good money habits. What children learn about money when they are little determines their attitude towards money later in life. Some of the things they should learn are that money should be earned, the importance of saving, the difference between needs and wants, and how to delay gratification.

It is important not to give in immediately to your children’s desires. Rather give them an allowance and let them decide how they are going to spend it. They will learn how to budget, save for items important to them and wait for their next allowance to buy other items they want (delayed gratification).

Encourage children to save money by keeping a money box and later, by opening a savings account at a bank. They should endeavour to deposit a certain amount every month and should be able to check their balance in order to motivate them to save more.
Teach your children the value of money by letting them work for their money. When they are young, you could give them additional money in exchange for additional chores. As they get older they can provide services to neighbours and other family members, such as gardening or dog-walking. They could also make and sell items like lemonade or beaded bracelets. Turning kids into young entrepreneurs can only help them later in life as it teaches them many important economic lessons.

Teach children how to shop smartly. They can learn how to compare prices across different stores and different brand names using promotional pamphlets or online using price comparison websites. They can also buy items they want when on sale. Eg. That smart new jacket from Woolworths can be bought when Woolworths has the 50 % off sale. Show them how you shop smartly and they will learn by example.

An important money lesson to teach children is that money does not determine happiness. By watching television and movies, they may get the impression that people with huge houses and expensive cars are happier than those who don’t have these things. We should teach them that although we need money for food, clothing and shelter, having excessive wealth does not make one a happier person.

Last but not least, teach them to live within their means and to avoid buying things on credit wherever possible as debt is the surest way to financial ruin.

Specially written for www.babiesonline.co.za by Sara Essop
 

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