It’s always great to see children embrace teenage, but with this phase of life comes great challenges. They are moving away from a carefree life to one which calls for realising responsibility. It may be hard to make teenagers understand that they have reached the age where they need to take intelligent decisions. While adolescence is a time for children to evolve and grow, it is a great time for parents to make them aware of the relevance and importance of money management.
We, as parents, can always say NO when our children ask us to buy stuff that is either out of the budget or isn’t needed right away. But, that will not be the right way to teach them how to manage money. Here are 5 simple hacks to teach your children to manage their pocket money.
- What they do not need
Children are impulsive and as soon as they get pocket money, the tendency is to spend on some games or food right away. So, it is always a good habit to let them know that ‘money spent is money gone forever.’ Once they have an understanding of their money being limited, they will eventually choose necessity over desire. Also, reminding them that what they want isn’t always what they need, will nurture them to make better decisions. You can ask your child to use their phone to save money and pay their own phone bills at end of each month. You can also do it with any other monthly expense they have. It makes them responsible money wise and takes them closer to a real world experience. So, we take them one step closer to manage their money better.
2. Make Them Earn It
While you give them pocket money without any conditions on most days, once in a while get them in the habit of earning an extra buck with their efforts. As a parent, you can always ask your child to do some mundane chores to earn some reward points which they can redeem for money later. This makes them understand the relationship between hard work and money. Once they realise that the money they get is hard earned, they will eventually save it for something that they need rather than spending it sloppily. They may save it for smaller things like buying a game console or long-term dreams such as buying a laptop for college.
3. Develop a Habit to Save
Piggy bank and saving jars teach them in their preteens that savings is good and it buys you your favourite candy every week. Likewise, as kids grow old, their needs and dreams grow too. It is not the candy any more but a trip to their favourite destination. Bigger dreams will obviously cost a lot more than candy. So, they need a bigger and better piggy bank. If parents could have their kids open savings account with an idea of long term dreams, fetching good returns and, also, locking their capacity on liquid cash, it would inculcate a good saving behaviour and make your kid money wise.
4. Smart money management apps
We are in a digital age where children as young as two years old know how to use a smartphone. Parents can make a good use of it. There are plethora of apps on smart money management which allows the user to manage their expenses, track them and also set a budget so that they don’t go overboard while spending. There are apps combined with cashless cards too. Parents can load money and track expenses while kids shop, eat and have fun without risking overspending or worrying about spending on the wrong things.
5. Let them make mistakes
Teenagers are often impulsive. The moment you give them some pocket money for the entire week, they end up spending it the same day on a party with friends or watching movies. Once the money is spent, they would definitely come asking for more. As a parent, you should ask them to wait for the whole week and let them learn from their mistakes. This will give them the understanding that cash in hand is best saved for needs rather than impulsive desires. It is always great to let your children make mistakes when they are young and when the money at stake is less. You can talk to them about curbing needless spending.
To our tech savvy generation, parents can teach them to manage their money via apps, have good money conversation and make them envision long term purchase goals. They will also be happy when there is more pocket money saved up.
The author is founder of Slonkit, a money management solution for youngsters