School season often begins with having candid conversations with your children about money, budgeting and needs vs. wants.
Depending on their age(s) and maturity, you could negotiate school budgets with your kids and allow them to manage those budgets themselves. If they want anything above the agreed amount, let them use their allowance money or work it off by doing additional chores around the house or for their grandparents or neighbours.
I recently read that if you have money problems it is more than likely something you learned from your parents – GREAT! One more thing to feel guilty about.
Here my top 5-tips on money and children
I. Make certain your child is old enough to understand the concept of money before implementing an allowance. Some experts recommend age 8, others recommend, immediately after they know NOT to eat it, but you know your child best so you make that call.
II. Ensure you talk to your children about COSTS (food, mortgage, clothes etc) SAVINGS, INVESTING (for their future) and DONATING (charity begins at home, and is a valuable message to teach our children. It is important that they understand that money allows them to set goals and make important choices.
III. Decide on an amount applicable for your child’s expenses – say it is €10, give them €20, then charge them €3 rent, €3 food costs, €2 Electricity usage, €2 clothing allowance or whatever applicable that week than out of the remaining €10 make them save €2. (Sounds harsh? I know, but they will thank you later, ok well maybe years later!)
IV. Make certain they use a portion of their allowance/savings to pay for some items they want or need, such as sweets or school supplies.
V. Give children control over what they do with their allowance (this one I find difficult). Let them learn from their mistakes while the stakes aren’t too high. Teach them to live within their means and to distinguish between needs and wants.
I regularly sit down with parents who have poor money management skills. It has a very negative impact on their lives. As parent we have lots of responsibilities and teaching your kids about money is vital.
Allan Matthew Cuthbert t/a Financial Wellbeing is regulated by the Central Bank of Ireland to advice on Mortgage,Savings, Life and Pension products