Money talks: Teaching your child about budgeting

The average cost of raising two children in Australia frombirth to adulthood is roughly $812,000. So even if you’ve never been restrictedby a budget in the past, parenthood certainly changes that for most people.

As your kids grow up, it’s important to explain the conceptof money and ensure they know it doesn’t come from an endless well. The lastthing you want is for your child to move out of home straight after high schooland be unprepared for a world of expenses including rent, utility bills,groceries and transport.

There’s no perfect formula to readying a young person forthe fiscal challenges of the world but with our list of tips, you can make someinroads while they’re still living under your roof.

Money doesn’t grow on trees

First and foremost, get across the message that money is alimited resource, one earned by working. Give reasons for why purchases yourchild suggest are unnecessary or not feasible, rather than just telling themno.

Set a good example

Kids will inevitably emulate their parent’s behaviour from ayoung age, so set a good precedent when it comes to finances. Shop for bargainsat the supermarket, wait until clothes are on sale and set aside money to savefor particular items.

Recycle

Not everything has a used-by date. Little tricks can helpyou save a few dollars at a time, such as keeping takeaway food containers ratherthan purchasing Tupperware, or using old t-shirts for exercising instead of buyinga new Nike top.

Let them make mistakes

It might be hard not to intervene but allowing your child tomake their own financial decision and deal with the consequences can be a goodlesson. Splurging on the latest iPhone might seem like a great idea at the timebut when funds are running low down the track, it could serve as a reminder tobe more frugal in the future.

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