How To Teach Your Child Not Tto Borrow Money?

About how, when, and how much to give your child to start spending money, you and I have discussed in earlier articles. Today I propose to talk to another vital topic - how to show a child benefit from the ability to save money for what you want, but do not take them in debt.

Imagine the situation: a 10-year-old boy Vanya parents give $500 every week as pocket money. Vanya has long dreamed of a game console, which costs $ 1300. The reserve fund * Wani have $320. Vanya's parents decided to lend him the necessary amount, but in the future expense allowance. That is to borrow money, not to buy him this thing. Educational effect of this decision is that the child for a while deprived of pocket money. During this period, he must feel himself to the rule: "You take other people's money at the time you give your and forever." More more effect will be achieved if the child has committed an unnecessary purchase spontaneously.

But in this scheme, there is one very important point, which should take into account the parents: do not borrow a child more than the amount of his two-week pocket the proceeds. Otherwise, you run the risk of spoiling relations with the child, because he was used to regularly receive money from you, and now proceeds to temporarily stop.

I do suggest to specify in advance a list of the child that you as a parent will pay him ourselves and of what your budget is not calculated. For example, you as a parent ASSUME spending on clothing, shoes, school supplies, school meals, etc. Payment terms that are not included in the list are discussed individually.

It is clear that in fact that is not included in the list of most frequently will also indirectly be paid out of your wallet. You are giving your child pocket money. But such a simple way the baby will be formed financial skills, which are then able to significantly ease his adult life.

And finally. Often, grandparents, too, can give the child a certain amount. In order to "party politics" was unified, and the formation of a child's financial skills passed smoothly, we recommend advance to discuss the issue with representatives of the older generation of your family. Find out delicately, how much money they plan to give to your child, and how often, because sometimes an additional source of income and can serve as gifts received in banknotes birthday.