Money | Cash lessons to teach your children

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What does your child do with their birthday cash or pocket money? Teaching children the value of cash, and skills and habits to help them manage cash in their adult life is now essential. But how?

From grandparents gifting cash to pocket money for chores, children can quickly earn a significant sum over the course of a year. They may have grand plans to buy that fancy toy, but you want them to save it.

Instead of the money issue becoming a hot of debate in your house,  take the opportunity to teach your child some cash lessons from the value of money to monthly budgeting. But how?

Let them control their own cash. If they overspend or lose their weekly pocket money, do not compensate them. This will teach them the value of cash, and that they will not always have someone to help them out if they waste their cash. 

They may initially spend their money on frivolous things but, over time, they will learn to manage it better. Teaching them to save for goals is important. To do this, identify an item that they want such as a €300 playstation. Show them how much they would need to save each month to buy it. Outline what they will have to give up each month to pay for this, and do up a chart so they can see their progress. This will also show them how reducing expenses makes goals come faster.

To ensure this works effectively, help them create a budget. Mark red for the money they spend, and green for what they earn. Budgeting from a young age is the best habit to pass on to them.

Finally, not even children can resist the temptation of an impulse buy. Use the 48-hour rule to get them into a habit; leave the item, and give them that time to consider their options. If they really want it after that, let them buy it with their own cash.

It’s all about the money…even for children!