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How To Help Your Child Be Money-Wise From Beginning?
As with other things in life, you need to be prudent while handling finance, not just you learn how to make good enough money but also how to keep that safe and in fact enable your money to earn money for you. And this habit can be fostered in your little kiddies from the time when they become old enough to understand simple maths. And here is given a few ways, to help your child be money-wise as many splurges in early life cast life-long perils which is difficult to rule out in later years.
Provide understanding of monthly family income plus expenses:
Children should not be kept unknown to family's financial situation as it will enable them to be rational in making their demands after accounting for all the necessary expenditures such as tuition fee, various utility bill payments, rent etc plus the investments planned out for meeting long-term financial goals.
Root in them knowledge of saving vs investing:
This is as easy, you can begin it by gifting a piggy bank and help them to save for their desires. You can also open a basic kids account which they can operate on their own as and when turn 10 years of age. Also, you can monitor their spending pattern by reviewing the account statement. You can also enable the understanding of return i.e. interest earned on savings account etc.
3.Encourage them to be with you as and when you shop:
This way you can enable them the understanding of market dynamics i.e. demand and supply, products that are in good in supply are way cheaper than goods that have a supply deficit. Also, by knowing the prices of different products, they can place a cap for themselves as to which goods are too expensive for them to go ahead with the purchase decision.
Provide an understanding of budgeting:
It is as important as relevant as it will help you to foster you in your child the importance of limited funds and how diligently one has to keep it as else one can be landed in a serious turmoil. And this can be taught to a child by emphasizing that pocket money given for a month is for a month and the child has not to overspend this money and in fact, make it a point to save some amount from it.
Also once they are done with their schooling, encourage them to engage in some part time job:
As it will enable a better understanding and importance of self-earned money.
