One of the most important things you can do to teach your children to manage money is to limit the amount of money that you give them each month. This is important because it gives them the opportunity to learn to plan ahead, and watch how they spend their money. It also encourages them to shop wisely. This may seem difficult to do and your teenager may complain when you do so. Here are five tips when beginning to start a set amount that you will give each month.
1) First sit down and discuss with your child the amount of money that you are considering giving your child. You should discuss what you expect that money to cover. It may include everything from clothing to school lunches to personal grooming products to gas to a cell phone. You may want to point out areas that you already take care of that may not be covered such as auto insurance or school fees or trips.
2) Be open to negotiation so that your child will feel good about this step, and see it as a compromise. This is essential if you want to get your child on board. You may want to start by offering a lower amount than you really intend to, so that when you reach a compromise, it will not be too much money.
3) Explain to your child that once this money runs out, that means they will have to do without. If they want extra money they will have to earn it. You may encourage your child to find a part time job, or you may have chores around the house that she can complete for extra money.
4) Stick to your plan. This is essential if this is going to work as a teaching tool. If it means that your daughter has run out of lunch money, simply provide food that she can take to school instead of buying lunch. It is important that your child learn the consequences of overspending now instead of later.
5) You may want to list items that your child will have to budget and plan for in advance, such as Christmas and birthdays for friends and family. You may also want to point out when sales on clothes or other items are throughout the year, so that your child will begin to see how to shop effectively
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