We should all have a financial education sufficient to overcome certain challenges, such as planning the use of our money, whether to track our expenses, find savings opportunities and cover unexpected expenses or meet goals; compare prices and identify offers; and make efficient use of financial products and services.
Perhaps, many of these challenges would be minor, if from a young age we put into practice healthy financial habits at home. Learning from small to handle our money would avoid problems to grow and would help us to have a better quality of life.
If you have children, we share 5 things about personal finances that you must instill in them and that probably they did not teach you.
Lesson 1. Money is earned with work
The first thing that children should learn is that in order to obtain something that we want, it is necessary to make an effort. Therefore, if they want a toy, for example, they will have to earn it by working.
Show your children that they can earn money by doing certain tasks. While you must make it clear to them that they have certain obligations such as laying their bed, keeping their clothes, ordering their toys or doing school work; for some activities they can receive a payment, either wash the dishes, help store groceries or sweep the house. It depends on the priorities and needs of each family.
Also, you can teach them other options to have income such as selling cupcakes, cookies, popsicles or anything else that comes to mind; take care of a pet, or be a kind of tutor, helping other younger children with their homework.
Lesson 2. Saving is easier by objectives
Sure many of us, when we were children we received money from our parents, but we spent everything immediately on the first thing we saw. This reduced our chances of buying something more significant.
Therefore, teach your children to separate a part of the money you give them, to buy a toy or something else, that is, to set specific savings goals. Thus, the savings will be easier to carry out.
On the other hand, children should know that in addition to considering a part of their savings to fulfill their dreams (for example, buying toys), they should also set aside a sum of money for emergencies, incidentals, help others and, in the future, for when they retire. Give them examples of your daily life and explain why that is very important.
A recommendation made by the psychologist Gala Almazán, is that to save transparent containers with the drawing of at least three objectives are used: “Savings” or “object to buy”, “Expense” and “Share”. The children will be able to see how their savings grow and maintain their motivation.
Lesson 3. Having a budget will allow you to know how much you spend
Have you ever made a budget of all the expenses you make as a child? Probably not. Then it’s time to make a budget with your children. But do not worry, it’s not a strict question either. Rather it should be seen as a step that will help us identify how much we spend and what we can save to meet our financial goals and dreams.
Together, make a monthly budget considering the age and amount of money children can receive, either for work or for the so-called “Sundays.” That way, they will know how much they can spend on candy, chips, juices, among others. Then observe what expenses are not necessary, which can be used to save and thus achieve the objective of point number 2.
Lesson 4. You must make decisions about how to spend money
How many times did we spend our “Sunday” on things that were not necessary and that ended up in the trash in a short time? If your answer was several times, then try to instill in children the value of what is useful and durable .
If the children have already managed to raise a certain amount of money, you should help them decide to buy a toy that excites them and that they will occupy several times. Also, you must help them understand that the same toy can have different prices in different stores, so they must learn to compare what is the ideal price, without losing the quality.
So at the time of shopping at the supermarket, describe them as responsible for the offers. Compare the prices of the products and help them identify the characteristics that must be taken into account when making a purchase.
Lesson 5. You may have to wait to buy what you want
And as we have said on other occasions in Finerio , perhaps the most important thing after having a budget is to stick to it. To fulfill it, you must have something called self-control, willpower and persistence . According to several studies , persistence helps children be able to postpone immediate gratification, which shows better academic performance and better personal skills and resources.
Therefore, parents should encourage persistence and self-control in children to achieve long-term goals, postponing rewards (such as impulse purchases) and continuing despite obstacles. The latter, rather, should be seen as a learning opportunity.
Children are extremely intelligent, however, adults by their own ignorance or other reasons do not teach them to take care of money. With these 5 points you can help your children have healthy finances in the future and can make the decisions that best suit them.