Moving to a new country invariably means better opportunities and a higher quality of life for your family. During this transition it is quite natural for children to be overwhelmed and influenced by the myriad options available, at their disposal. This could be the perfect juncture for you to impart values of financial discipline to your children.
While it is never too early to teach them about financial management, it is ideal to start encouraging them to set goals and begin saving when they are between the ages of 12 to 15. Here are a few ways in which you can inculcate financial discipline in your child.
Delegate responsibilities
Trusting your children with a few daily chores will make them feel responsible at a young age.
For instance, once a week, your child can be responsible for the grocery needs of the family. Give him/her the money and the list of items required with instructions that you would want them to follow. After they return home with the items, you can check whether they missed anything from the list or bought something on a whim. This could be your child’s to initiation into the world of money management.
Teaching kids to save money empowers them to learn to earn
In certain cultures, it is believed that children must earn only after they complete their education. But this imparts a sense of dependency in them till their early 20’s. Encourage teenagers to take up part-time jobs or complete household chores to earn their allowance.
For example, if they are interested in working at a bakery for a few hours after school, they may even learn a life skill in addition to earning money. If your child is too young to work outside, get them to do some simple household chores – like walking the dog or folding their clothes – and reward them with a weekly allowance.
What is financial discipline? Learning the difference between needs versus wants
Overindulgence can prevent your child from distinguishing between needs and wants. Giving in to all their demands may not teach them the value of money. Help them develop a strong understanding of their wants and needs and avoid giving in to their desires. Set rules – if your child is keen on purchasing a ‘want’, they have to be a part of the buying process by contributing to it with their pocket money.
How can I help my child manage money? Introduce budgeting, inflation, saving, and investing
Even adults sometimes struggle with critical financial concepts like inflation and investments. If your child has reached adolescence, teach them basic concepts of personal finance like budgeting, savings, inflation, and investing wisely. You can then assist them in opening a bank account and saving money in a bank so that they can earn interest and realise the benefits of saving.
Teaching kids about money should involve helping them learn to make wise choices. If they desire a new laptop or the latest gaming console, introduce them to the concept of budgeting and help them plan their purchase. Encouraging them to assess where they spend their money will ensure your child is financially savvy at the right age.
As an expat, part of your finances goes towards sending money home. When teaching money management to your kids you can also explain how you budget and save according to the amount you remit month on month.
As an expat, you are likely to be transferring money to your loved ones back home using a money transfer service such as Xpress Money. Educate your child about the currency exchange rate and the importance of the money that is being transferred.
With these tips to inculcate financial discipline in your children, they will not only be financially disciplined but will also have a better chance of achieving financial independence at an earlier age.
Also, Read: Expat Money Management Series: How To Manage Your Money As A British Expat?
