Certain parents decide to give their child an allowance. This is a small example within a large conversation regarding family finances. The act of providing an allowance is interesting because it can either be a method of teaching a young person what it means to have a budget, or can do just the opposite. Some guardians believe that providing children with an allowance is essential for teaching them about finances and budgeting while parents on the opposite side of the fence say that it can create a sense of entitlement and may give children a skewed concept of finances.
Having children is one of life’s biggest expenses. It’s hard to explain in words how complex the finances can be for raising even a single human being. However, it becomes easier if you can create some sort of monetary awareness within your son or daughter. From there, they will become more understanding of how their actions affect your budget, both positively and negatively.
Family planning is an intricate process, and these tips below are listed to help you integrate budget stability within your situation. From there, you and your family will be more on the way toward true steadiness.
Be smart with allowance
If you’re providing an allowance, make sure your child is giving something back in return. Whether it’s a specific chore you actually need help with, or even a routine one just to get the point across, it’s critical. It’s important to teach them from an early age that when they are receiving money, they need to be providing something in return.
Make savings a priority
Part of establishing budget awareness is teaching the baseline fundamentals of what it means to save money. Even if it’s on a small scale, teaching your child how to save can help them understand the concept of earning and keeping resources. This has a trickle affect through a family structure.
Explain spending decisions
Talk to them about pricing. Whether they’re tagging along at the grocery store or in some other spending situation, make a point to explain why you would choose one product over another where price is concerned. Try and explain that getting an equivalent item for a lower price should usually always be the end goal.
Similar to any other teaching and learning situation in life, you need to be consistent. It’s human nature for people to get comfortable when they’re receiving something like an allowance. If you sense that your child is lacking on chores or simply sidestepping their end of the bargain, make it known. Whether it’s retracting payment for a week or two or something else, the principle of accountability will be better understood.
Family planning is a complicated process, especially when young people and finances are considered. It’s a wise idea to get a jump on it early on, as the sooner your child understands the basics of budgeting, the more adaptive they’ll be within your changing environment.