How to Teach Kids to Budget Their Money

Today’s generation is overindulged with money and material possessions. And it is this fact that makes it extremely important to raise them as money-conscious adults. Let us consider it this way – Have you ever tried asking your kid from where does the money come from? Are they aware of the value of the hard-earned money? Do they believe that money simply pops out of the ATMs? It is time you start teaching your kids the importance of money management and make them realize how money is earned, and it’s not like coming out of nowhere.

To make your children truly conscious of the money they spend, you need to teach them how money is earned. Raising children with awareness about earning money is all-important to develop in them the habit of money management. Teaching them to save, budget, and spend their money efficiently can make them financially literate and well-versed individuals capable of managing money in the future. We understand teaching kids about money management could be a daunting task for parents, but with discipline and planning, you can definitely make it happen.

Here we, at JP International School, one of the top schools in Greater Noida, would like to share with all the parents a few effective tips that you can try adopting at home to teach your kids about money management and give them the right headstart for budgeting their money.

Motivate them to save

First things first. Saving money is important. You need to motivate your child to save the money they earn by helping them with the house chores. Piggybank is a great idea followed through generations. Use a clear jar and let your kids get a visual feel of how much money they are saving and with each penny put in, their money is growing.

Help them differentiate their wants from needs

Most children today are inclined towards their wants. You need to teach them how to differentiate between their wants and needs so that they can budget their money efficiently. If they want to purchase a non-essential item, teach them why it is unnecessary and what they could actually do with that much amount of money spent to buy a recreational item. However, if your child puts his wants over his needs, let him find a way to earn the money for it. This will help them develop a sense of appreciation for the products they buy as well as the money they spend on them. This way, they will more aptly understand how much efforts have to be put in to earn money and why saving is important.

Set a goal to save and spend

Your child must learn to budget money for each of his spendings. Each time they get money, they need to budget it based on what they are saving for. Start with simple short-term spending goals and slowly move on to long-term goals. Teach them how to split their money for each of their goals and budget their savings accordingly.

Set an example

Always remember, it is important to follow what you preach. Hence, before you go on schooling your kids about saving money and spending right to maintain a budget, make sure you yourself are doing the same. Set them an example with your ways of approaching money and budgeting your needs. Remember, your little ones are keenly watching you. Can you imagine the confusion they get when they see you squandering with money but teaching them to be frugal? Follow healthy financial habits and talk to your child about your spending decisions so that they will more likely follow your path when they get older.

We, at JP International School, have always believed that education is not merely about academic excellence. It is rather about empowering young minds with an independent thought process that makes them grow into responsible adults. And since money is one of the most important resources to lead a good life, it is crucial that children are taught about money management right during their school years. At JPIS, we teach our pupils about money management through various activities, which enables them to understand the concept better. If parents too, start teaching the kids about how to save their money, we are sure, these little budding geniuses will certainly grow into highly productive individuals with strong money management skills.