6 ways to teach your kids how to budget-
1. Put their money in categories
2. Save money for large purchases
Leaning how to set aside money to save up for large purchases is a great skill that sadly many adults still haven’t learned. If your son or daughter later on needs a new car or wants to buy a home, they will have the discipline to save up. The natural tendency for kids is to spend whatever money they have and then ask mom and dad for more money.
3. Pay bills on time
Kids need to learn how to pay their bills on time. Teaching them how to avoid late fees will allow them to have more money later on. An extra $50 for late rent, or interest fees can really add up. If these habits aren’t fixed before leaving home, they learn what a collections agency is the hard way. With their bad credit, they will come back to you to bail them out.
4. Dealing with credit cards
If you follow Dave Ramsey, host of a national radio program on finances, you will follow his counsel on no credit cards. Credit card companies know that if they can get a kid to spend irresponsibly while they are young, they will be in over their heads for the rest of their lives. Help them to understand how to simply throw the constant credit card mail away. The skill of avoiding credit cards can be compared to teaching your kids to say no to drugs. Say no to credit cards.
Make sure your kids are learning these skills before they leave home. That way they can live financially independent and be much happier through life.