Financial freedom – Tim Connolly

Bedtime Books, Educational Games, Financial freedom

Nurturing Financial Literacy: Teaching Kids about Good Debt and Bad Debt

Posted on January 19, 2024 by Tim Connolly

Financial literacy is a crucial skill that can empower individuals to make informed decisions about their money. While it’s never too early to start teaching children about financial responsibility, focusing on the concepts of good debt and bad debt can lay a strong foundation for their future financial well-being.

Understanding Good Debt:

Contrary to common belief, not all debt is inherently bad. There is such a thing as “good debt.” Good debt is an investment in the future that has the potential to increase in value over time. For instance, taking out a mortgage to buy a home or obtaining a student loan for higher education can be considered good debt. These investments have the potential to appreciate and contribute to long-term financial stability.

Teaching children about good debt involves explaining the concept of using borrowed money to make investments that can generate returns or increase their overall net worth. It’s essential to emphasize the idea that good debt is a strategic tool rather than a financial burden.

The Role of Bad Debt:

On the flip side, bad debt refers to money borrowed for non-essential items that depreciate quickly or don’t contribute to future financial well-being. Examples of bad debt include high-interest credit card debt incurred for unnecessary purchases or loans for depreciating assets like luxury items. Introducing kids to the concept of bad debt helps them understand the consequences of making impulsive financial decisions and accumulating debt without a clear repayment plan.

Using Books to Teach Financial Literacy:

Books play a vital role in nurturing financial literacy in children. Incorporating stories that illustrate the concepts of good debt and bad debt can make these ideas more relatable and engaging for young minds. One such recommended book is “Good Debt Bad Debt Book” which introduces financial concepts in an age-appropriate and entertaining way. Reading together and discussing the characters’ financial decisions can help children grasp the importance of distinguishing between good and bad debt.

Practical Exercises for Financial Education:

To reinforce these concepts, parents and educators can create practical exercises. For instance, setting up a mock store at home where children can use play money to make purchases helps them understand the value of budgeting and making informed spending choices. Additionally, discussions around hypothetical scenarios, such as saving for a big purchase versus using credit, can provide valuable insights into the consequences of financial decisions.

Encouraging Responsible Financial Behavior:

Instilling financial literacy in children involves more than just imparting knowledge; it’s about fostering responsible financial behavior. Teaching kids about good debt and bad debt should be accompanied by discussions about budgeting, saving, and the importance of delayed gratification. Emphasizing the significance of setting financial goals and working towards them can help children develop a positive and responsible attitude toward money.

Conclusion:

By incorporating the concepts of good debt and bad debt into financial education for kids, we can equip them with the skills needed to navigate the complex world of personal finance. Utilizing engaging books and practical exercises ensures that these lessons are not only informative but also enjoyable. As we empower the younger generation with financial knowledge, we pave the way for a future where individuals make informed and responsible financial decisions.

Bedtime Stories, Financial freedom

The Importance of Reading Bedtime Stories To Teenager

Posted on October 5, 2023October 5, 2023 by Tim Connolly

While bedtime stories are often associated with young children, the importance of reading to teenagers should not be underestimated.

Here are several compelling reasons why continuing to read bedtime stories to teenagers is valuable:

Strengthening the Parent-Teen Bond: Adolescence is a time of change and challenge. Reading together fosters a strong emotional connection, providing a safe space for open communication and understanding between parents and teens.

Cultivating a Love for Reading: Reading to teenagers encourages continued interest in books and literature. It reinforces the idea that reading is a lifelong source of enjoyment and knowledge.

Expanding Vocabulary and Comprehension: Reading aloud exposes teens to complex vocabulary and sentence structures they might not encounter in everyday conversations. It challenges their language skills and comprehension abilities, enhancing their verbal proficiency.

Critical Thinking and Analysis: Bedtime stories can include more sophisticated narratives that require critical thinking and analysis. Discussing characters, plot twists, and moral dilemmas can stimulate intellectual growth.

Stress Reduction: Adolescence often comes with academic pressures, peer interactions, and emotional challenges. Reading together provides a calming and comforting bedtime routine that can help reduce stress and anxiety.

Cultural Awareness: Many stories explore diverse cultures, perspectives, and historical events. Reading such stories fosters cultural sensitivity and an appreciation for diversity in teenagers.

Encouraging Empathy and Emotional Intelligence: Teenagers can benefit from stories that explore complex emotions, relationships, and ethical dilemmas. Such narratives encourage empathy and emotional intelligence, helping them relate better to others.

Escape and Relaxation: Adolescence can be a tumultuous time, and books offer a form of escape. Engaging in a captivating story allows teenagers to relax, unwind, and temporarily escape the challenges of their daily lives.

Lifelong Learning: Reading to teenagers exemplifies the value of lifelong learning. It sends the message that gaining knowledge and exploring new ideas never goes out of style, inspiring a growth mindset.

Time Management: Incorporating a nightly reading routine teaches teenagers time management and discipline. It encourages them to allocate time for leisure and self-improvement amid busy schedules.

Discussion Opportunities: Bedtime stories often contain thought-provoking themes and moral lessons. These stories create opportunities for meaningful discussions about life, values, and the world, fostering critical thinking and a sense of shared values.

Positive Role Modeling: Parents who read to their teenagers model positive behavior and the importance of continued education. It sets an example of lifelong curiosity and self-improvement.

Improved Academic Performance: Regular exposure to books and complex narratives can enhance a teenager’s reading and comprehension skills. This, in turn, can positively impact their academic performance in subjects that require strong reading abilities.

Digital Detox: In a world dominated by screens and digital devices, bedtime stories offer a screen-free, calming alternative that encourages relaxation and helps teenagers disconnect from the digital world.

A Sense of Tradition: Continuing the bedtime story tradition from childhood to adolescence creates a sense of continuity and tradition within the family. It can be a cherished routine that teenagers look forward to each night.

In summary, reading bedtime stories to teenagers is a powerful way to nurture their intellectual, emotional, and social development. It strengthens the parent-teen bond, cultivates a love for reading, fosters critical thinking, and provides a calming routine amid life’s challenges. So, whether it’s an adventure, a classic novel, or thought-provoking nonfiction, consider reading to your teenager at bedtime—it’s an investment in their growth and well-being.

financial education, Financial freedom, financial literacy

5 Financial Tips for Teens

Posted on April 24, 2022 by Tim Connolly

Although the study identified numerous gaps in economic and financial knowledge, it also showed teens do know where to look for credible information. Two-thirds (67%) recognize they should use their school as a resource.

“One of the things we hear often is that some textbooks are written too academically for most students to understand the concepts,” said Jack E. Kosakowski, president and CEO of Junior Achievement USA. “Our programs, which work as a complement to the school curriculum, are written from the perspective of today’s teens and use digital content to help bring economic concepts to life for students.”

Beyond the classroom, another 63% of students believe they should use their parents as resources for economics education. Help influence the financial literacy of a teen in your life with these practical money-management tips adapted from the curriculum.

Set goals. Managing your money is more meaningful when you’re doing it with purpose. This might mean budgeting to ensure you have enough money to maintain your auto insurance and keep gas in your car, or you may be saving for a big senior trip. Knowing what you want to achieve with your money can help you plan how you spend it more wisely.

Weigh needs vs. wants. When you begin making your own money, it’s easier to indulge your own wishes and spend money on things you don’t necessarily need. To some extent, that’s not a bad thing; rewarding yourself is fine when you do so within reason. That means not exceeding your available funds, and not forsaking things you truly need, like gas money to get to and from a job or school.

Get a debit card. Most people find that having cash on hand makes it easier to spend. If you use a debit card instead, you’re an extra step away from spending so you have a little more time to consider your purchase. Another benefit of a debit card is it helps track your purchases in real time so you can keep constant tabs on your balance and ensure you don’t overdraft your account.

Start a savings habit. Even if your income doesn’t allow for much, it’s a good idea to get in the habit of setting aside a portion of each check. It may only be $10, but over time each $10 deposit can build your account toward a long-range goal.

Protect your privacy. Teens who’ve grown up in the digital age tend to be less skeptical and cautious about privacy matters than their elder counterparts.

It’s important that young people understand the potential impact of failing to protect their privacy when it comes to financial matters, including the possibility that their identities could be stolen and all of their money siphoned away. Teaching teens about money and it’s security is an essential lesson in economics.

financial education, Financial freedom, Helpful Tips

Tips to Teach your Kids about Money

Posted on April 24, 2022 by Tim Connolly

I recently did an interview about tips to use when teaching kids about money. In thinking through some techniques, I was able to lock on some specific things we did which helped to better instill good money management habits in our kids. Here they are:

1. When our daughter was in her tweens, we started working with her about purchasing decisions and saving up for things she wanted. Here’s what we did: We increased the amount of her allowance, gave it to her quarterly, but then had her use her budget to buy all of her own clothes and other personal items

– We kept track of inflows and outflows on an excel spreadsheet

– If she wanted something we would ask her if that was where she wanted to spend her budget. If she said yes then she made the purchase but then she had to wait until she had enough money in her account to buy other things

– Right after we put this into effect, she and my wife were in Nordstrom and our daughter saw a pair of flip-flops she wanted. She asked my wife if she could get them. My wife responded, “Is that where you want to spend your money?” She ended up buying flip-flops at Target.

2. Both our kids got checking accounts before age 16 and credit cards at age 18. The rationale for doing is that we wanted to make sure they learned about the concept of interest and making payments versus paying their bill in full every month. We wanted them to learn good habits while at home as opposed to learning bad habits while at college.

While discussing with our daughter, she asked the question, “You mean if I don’t pay it off in full every month then I’m paying interest to the bank and getting nothing in return?” After I told her that was exactly the case she vowed that she would always monitor her spending so she could pay her bill in full every month. Both our kids are experienced with credit cards and neither has paid a dime in interest charges because they couldn’t pay their bill in full every month.

3. Our eldest is out of college and youngest is still in college. When our eldest got her first job as a nurse we had a deliberate discussion about her saving for retirement.

She contributes the maximum amount to her 401k, has saved up enough for six-months of living expenses, and lives off the rest. She drives a ten-year-old car because it’s “good enough”. She still indulges in the nice purse or a weekend away, but does so within her means.

4. Most of the discussion has been about our daughter, but we did the same things with our son. He and his big sister are better disciplined money managers than many adults I know. Oh and our son is also mainstream autistic and still is able to manage his finances like a hawk.

Financial Advice, Financial freedom, financial lessons, teaching kids about money

How to teach children the real value of money

Posted on April 21, 2022 by Tim Connolly

Start young

The early experiences children have with money can shape their financial behavior as adults, according to a study published by the UK government’s MoneyHelper service.

By the age of seven, the University of Cambridge study found, most children are capable of grasping the value of money, delaying gratification and understanding that some choices are irreversible or will cause them problems in the future.

The research suggests children who are allowed to make age-appropriate financial decisions and experience spending or saving dilemmas can form positive “habits of the mind” when it comes to money.

This could lead to a lifelong improvement in their ability to plan ahead and be reflective in their thinking about money, or they may learn how to regulate their impulses and emotions in a way that promotes positive financial behaviour later in life.

Make it fun

There are lots of free resources you can use to teach financial education to kids at home. If you prefer board games, Money Match Cafe or Pop to the Shops by Orchard Toys are educational and imaginative, while Cheeky Monkeys subtly provides useful financial lessons about the consequences of avarice and risk-taking.

Finally, do not underestimate the value of playing games such as “going to the shops” at home with real coins. Be sure to set a budget.

Discuss the purpose of money

Collier suggests taking photos of different items in your home that can then be classified into necessities and luxuries, triggering a discussion about what money is for.

You could use these activities as a springboard for discussions about how adults need to prioritise what they spend money on and how difficult that can be if you feel tempted to buy something you cannot afford.

The charity Child Poverty Action Group suggests you ask your child to imagine a child the same age as them, and talk to them about what that child might miss out on if their family doesn’t have money. Its spokesperson Kate Anstey says: “Speaking to children about poverty can help to raise awareness and understanding of poverty and inequality.

It might seem like a difficult topic to broach but teachers who talk about poverty in their classrooms find that children actually cope with it very well.”

Go to the shops

One of the best places to teach children about money is a shop. “Being able to handle money and buy something yourself is very special: it builds up your confidence with money.

If you pay with a contactless card, explain how it works – that although you are not using coins, the money is still coming out of your bank account – and discuss the groceries you buy. Why might you choose to spend more on Fairtrade chocolate or free-range eggs?

Are the more expensive products always better quality? Ask them whether they would like to do a blind taste test at home to check whether they can tell the difference between different-priced brands. Is it worth the difference in price?

Be on the alert for BOGOFs (buy one, get one free offers) and complicated discounts. Teach children how to compare different deals. “It’s absolutely essential that we teach children about money in context,” says Lord, a former maths teacher. “Encouraging children to work out the cost of shopping and comparing offers so they understand the value of goods is an essential life skill.”

Helping your children to master estimating is also very important, she says. “It helps children to develop a real feel for numbers so that they can easily spot when they’re being overcharged and avoid making costly mistakes.”

Make your child’s investments meaningful to them

Open a Junior Isa for your child and buy a few shares in a supermarket or restaurant chain you visit regularly with them, suggests John Lee, the author of Yummi Yoghurt, a book about investing aimed at teenagers.

That way, when you go there, you can explain to your child that you both have a “vested interest” in supporting that business and will hopefully one day get a reward, in the form of a dividend, if the business does well.

You could also talk to them about how you choose other funds for their ISAs and the impact you hope those investments might have on society or the environment. “The important thing is to involve your child and give them an awareness of the companies that you’re buying shares in,” Lee says.

Take them to a charity shop

Charity shops are particularly good places to take a small child to spend their weekly pocket money. They often find a bargain and you can use the opportunity to discuss the power of their pound: how does it make them feel, knowing they are supporting a good cause as well as getting something for themselves?

Point out the positive impact on the environment of buying secondhand and, when you get home, look up how much the item would have cost new and talk to them about how many more weeks it would have taken to save up for it.

Financial Advice, financial education, Financial freedom

How Your Child Spends His Allowance

Posted on April 21, 2022 by Tim Connolly

Whether or not you put strings on receiving the allowance, once it’s him, you really can’t make your child use it as you want. That’s just not fair (not that everything has to be fair, of course). After all, you want your child to think for himself when it comes to money. According to a survey on teens and money consulted by USA Weekend, 75 percent of kids had complete control over their money.

You may want to place some expectations on how your child spends it, but you really can’t require your child to use the allowance as you see fit. You can, however, focus on how to teach kids about money by discussing these issues with your child.

Dictating Your Child’s Spending

In receiving an allowance, your child faces a great temptation to spend it all at the first opportunity. But one of the reasons for giving an allowance is to make sure that your child has money for the things she wants when she wants them. To do this, she’ll have to think ahead.

Piggybank on It

Some clothes are necessary (such as a winter coat, underwear, and a pair of shoes). Having 15 sweaters, however, may be desired but certainly not necessary. Consider suggesting that your child pay for the extras in this category from his allowance.

You can help your child decide how to allocate her money. Of course, the allocation will vary greatly with a child’s age, the amount of allowance, and other factors. Here are some categories that are commonly considered:

Car. Obviously, this is only a concern when your child is of driving age. He may be responsible for putting gas in your car when he uses it, or he may be able to save up and pay for the purchase and upkeep of his own car.

Charity. When you give to charity, you set an example for your child to follow. Certainly, children learn about giving to charity through the UNICEF Halloween collection program, the Girl Scout cookie drive, and in religious schools. You can suggest she set aside part of her allowance for charity and help her decide how to make her contributions.

Clothing. As kids (especially girls) get older, they tend to spend more money on clothes.

Entertainment. The extent to which your child uses his allowance for fun is up to him. In the past, teenage boys used to get bigger allowances than their female counterparts because boys were expected to pay for dates. Today, teenagers don’t have the same dating mores that their parents had. For the most part, they don’t have dates in the conventional sense—they may go out in groups or do other activities together. Generally, girls and boys share the cost of entertainment.

Savings and investments. It’s important that children start at an early age to view saving money as a regular activity. The best way to do this is to suggest that they set aside part of their allowance for this purpose. If you insist that they’re responsible for paying for certain things such as going to the movies, then they’ll be forced to save or go without.

School expenses (extracurricular activities and other expenses). While school may be public, many trips and other activities at school are certainly not free. You may want your child to be responsible for these things. Again, you may decide to share expenses (for example, she pays the activity fees but you buy the equipment).

Toys and video games. As with entertainment, kids should be allowed to use their allowance on fun things, as long as allocations have been made for savings and other categories that are necessary.

How Much Parental Guidance?

Providing guidance on what your child should do with his allowance is certainly a wise thing on your part. But how much influence should you exert? Can you insist that a certain percentage of the allowance go toward savings? Can you require your child to pay for all her entertainment costs?

There are no hard-and-fast rules; decisions here are guided in part by the age of your child, the size of the allowance, your personal beliefs, and other factors. Clearly, whatever you think the allocation should be, getting your child to follow suit requires a little finesse on your part.

Watch Your Step

If your child is supposed to pay for his own toys and entertainment, it’s not a good idea for you to pay for them whenever he’s short of funds. This won’t help in teaching responsibility for managing money. He’ll just have to forgo a movie it he doesn’t have the money for the ticket.

At one extreme, you can say nothing and let your child make all his own decisions. On the other extreme, you can set requirements on how the allowance should be allocated among the different categories of expenditures.

Somewhere in the middle is where you’ll probably want to fall, providing guidance without making the child feel like there’s no point to receiving the allowance in the first place.

Of course, it goes without saying that your child should know without a doubt that the allowance would stop in a second if it were to be used for drugs, alcohol, or other illegal activities.

financial education, Financial freedom, financial lessons

5 Reasons to Give Kids an Allowance

Posted on April 13, 2022 by Tim Connolly

For the better part of my life, I didn’t know this truth. On the contrary, I believed that more money was the answer. I was convinced that if we just made more money, won the lottery, or received some unexpected inheritance, all of our money problems would vanish.

But the more we made the worse our problems became. Because I didn’t know how to manage what we had, more would have never been enough. We didn’t save, we didn’t give, we didn’t plan, and we had no idea where all the money went.

Unless your children learn simple, wise money management techniques, more money will never be enough.

The simplest way how to teach kids about money is by putting them on an allowance and then requiring them to suffer or enjoy the consequences of their financial decisions.

5 Good Reasons to Give Kids an Allowance

1. Teach kids about real life

Nothing beats an allowance for a hands-on course in values. Having their own money teaches them about responsibility, consequences, saving, and charity.

2. Help distinguish needs from wants

Do they really need that new video game or those peace sign earrings? Having their own money forces kids to think about what to spend it on. It doesn’t take long for them to realize that when it’s gone—it’s gone!

3. Put an end to the nickel-and-diming

Because the child’s allowance represents a regular expense, you create a set budget item called “Kids’ Allowances.” That brings calm to previous chaos by stopping that constant drip, drip, drip of money flowing from your pocket to random stuff for them.

4. Build trustworthiness in a child

By giving kids money to manage, you demonstrate that you trust them. And they soon learn that to keep the money coming, they need to become trustworthy.

5. Promote self-confidence

Managing money has a magical effect on a child’s self-esteem. Teaching kids how to give some of their allowances to charity, save some for a long-term goal, and spend some now gives them the tools of self-reliance.

Start young

There are no set rules for when to start an allowance program. However, I suggest waiting until kids are old enough to understand the concept that money buys things, of taking care of those things and making choices, which is usually around age SIX.

How much?

Though many families use age to determine the amount (by age, $10 for a 10-year-old is one example), think about how much money your child needs. Turning money over to them that you would be spending on them anyway is a good way to start thinking about this.

How often?

Whether it’s weekly or monthly, kids do better when you stick to a schedule.

Younger kids tend to manage their money more effectively when they get it weekly, since out of sight often means out of mind.

For older kids, consider a monthly schedule so they can learn the basic principles of budgeting.

Work for pay?

Think about your goals when it comes to the allowance-for-chores quandary. If your main goal is to teach your kids to manage money, give them a basic allowance with financial “chores” attached, such as paying for their own collectibles. If you also want to teach kids the value of working for pay, pay them for extra chores on a job-by-job basis.

Back off

The purpose of an allowance is to teach kids to become self-governing with money. Encourage kids to save a given percentage, set aside a percentage for charity (they’ll learn the value of giving back), then give them the freedom to decide how to spend the rest.

financial education, Financial freedom, Kids, money management

Teaching children money management

Posted on August 26, 2021August 27, 2021 by Tim Connolly

Saving money is important. That’s a given for most parents, if not all. We have heard multiple wise sayings that convey the point of how it is of crucial importance to plan ahead and to ensure there are sufficient funds to cover any future expenses. This is especially true once couples enter into parenthood because not only do they have to feed two mouths, but now with the family’s expansion, the cost of living is only going to increase.

Parents would save money for their children’s future, which includes their daily expenses and future education this can only be possible when parents set up plans and strategies regarding money management for children.

This results in poor financial management of the next generation. Many of our children only realize the necessity of wise money management in their young adult years, and by then many have already developed unhealthy spending habits or lacked the necessary financial management skills only to remain puzzled and overwhelmed by the immense financial burdens.

So, parents must act now in being better educators, and not just fulfill the responsibility of being providers of the family. As the proverb goes “Give a man a fish and he will eat for a day. Teach a man how to fish and you feed him for a lifetime”.

With the Chinese New Year Celebration having just passed, many Chinese children would have received their ‘ang paos’ (red packets) enveloped with money from relatives as a gift of blessing to the young. There is no better opportunity than now to inculcate the value of saving money and managing it well now.

Do you know that almost 28% of Americans have zero savings set aside to cover emergency expenses. Saving money is a habit since young that needs time to build, and unfortunately even some adults have yet to master it. Yet, many parents are not assisting their child to become financially literate.

All lessons should start before the age of seven, not excluding saving money of course. The earlier you start your child’s financial education process, the better prepared your child is. You may start by explaining important concepts such as setting a budget, saving, and goals. Also, you may model good examples as their little eyes are watching you. Children learn not just from the instructions they are given, but also from imitating their parents.

It is important to let your children know that you are always open for conversations about money as this will encourage them to ask questions about saving money. Find out what they are saving for, this way, you can be assured that you are comfortable with what they intend to buy. From doing so, you may make use of the conversation to teach them simple math calculations and guide them through whether they can find it cheaper somewhere else and be a wise consumer.

financial education, Financial freedom, Kids, money management

How to give financial education for teens

Posted on August 26, 2021August 27, 2021 by Tim Connolly

Money is an indispensable resource and we have to be wary of how we utilize it. It takes us a long time to get the hang of the concept of money management. But, what if we teach our children from a very young age so that they won’t have to face the same challenges as we did?

Children are fast learners, and they observe everything very keenly. We have to teach in a way that they will remember these lessons for their entire lifetime. Here is how we can teach our children money management so that it has a long-term impact on them.

Give them pocket money

You can give your children a fixed amount every month for them to spend on whatever they want. It will also give them the independence to purchase what they want. They will also learn a very important lesson, ‘with great power comes great responsibility.’ Sure, they will sometimes recklessly spend their pocket money, but after one-two incidents, they are going to get the knack of it.

Let them handle some expenses

How long will you do your children’s work? At some point, you have to start letting them do it on their own. So why not start as early as possible? You can let your children handle some money-related matters appropriate for their age.

Things like shopping for their clothes, buying stationery, and so on can be done by kids as soon as they start growing up. If they want something from the market, then let them go on their own and purchase it. It is going to increase their self-esteem and also give them some practical experience with money.

Let them be accountable for themselves

Children are bound to bungle it up once in a while. And that is alright. We just need to teach them to be accountable for themselves. If by any chance, they lose some money, they need to hold themselves accountable for it.

Your job is to not panic, stay calm, and let your children do their job. If they mishandle some money, then don’t stress out. Instead, help them overcome the situation. It will be more helpful to them, rather than getting angry at them for their blunders.

Let them handle money-related chores at home

There are many chores in the house that require a trip to the market. You can sublet that work to your children. You can give them tasks like picking up groceries, buying stationery for the house, buying miscellaneous items, etc. your children will get a hands-on experience of the real world.

When we want to make our children independent, more often than none, things like surviving in the day to day world are missed out while focusing on the bigger things. We focus on making our child’s careers and making them successful.

Let them explore different options and then discuss

There is so much involved in how to teach kids about money as it involves understanding and implementing theoretical and practical knowledge for same. You can teach them how to manage money, different ways to invest, different ways to save, etc. This way they can learn it in detail.

Teaching Teens about money when they’re young lays the foundation for responsible money management later in life. Children whose parents emphasize the importance of financial literacy and encourage them to spend and save thoughtfully develop a healthy perspective on money.

financial education, Financial freedom, Kids, money management

Teenage money management tips

Posted on August 26, 2021 by Tim Connolly

Teach Them How To Save

A great way to teach them how to budget is once they’re earning their own money, to give them several ‘buckets’ to split their earnings into. They can put some into expenses, some into personal spending, some into savings.

Give Them An Allowance

We’ve always given our children a small but consistent allowance.

They can choose to spend it or save it. In the beginning, they would spend it on silly toys and tuck-shop. Our eldest son wanted to get a tablet, so we said that if he saved up half of the money for it, then we would pay the other half.

Open A Bank Account For Them

Our son has his own bank account, which is a savings account, but he can withdraw from it when he needs some money.

It’s up to you to decide if they should have a credit card, but we decided that their basic needs are met by us.They don’t need anything else. Whatever else they want is not a need, so they should rather save up for it than go into debt.

Teach Them Why Debt Has Negative Consequences

Debt management is not just about paying back what you’ve loaned, but also trying to avoid debt in the first place. If your child is lucky enough to go to college, you might have been saving for their college fund.

They should understand how long it took to save up for this and what you had to forego to be able to set this money aside every month. Make sure they understand that paying back a loan comes with interest. Show them how much more they have to pay the longer they take to pay back a loan.

When your car goes in for a service, take them to the garage with you, so that they can hear you discussing the costs of replacing the brake pads. Show them that similar items might cost more in different shops, and why it’s beneficial to shop around to find good deals.

Sometimes you might have to forego buying something because you just don’t have enough money for it right now. Show your teen that it’s okay. Many things we think are needs are actually wants, and we can get by without them.

Financial education for kids can be learned in both ways either by teaching them regarding money, savings or show them some real-life examples that how you spend your hard-earned, savings so they easily understood money’s importance in their life.