How to Use Children Budget To Instruct Them About Finances

November 5, 2011 · Posted in Family 

As children, it is often difficult to differentiate between needs and wants. This applies especially to teenagers. Due to peer pressure and advertising appeal, teenagers are often more likely to spend on unnecessary items. Kids are to be educated on the difference between needs and wants. They need to think and decide what is necessary spending and what is not. Needs are necessary for their very being such as food, shelter, health and friendships. On the other hand, wants are mostly feel-good-to-have or ‘cool’ stuff.

Here are very good questions that you may ask your kids to ask themselves when teaching them the difference between needs and wants. Questions that make your kids think and rationalize.

Question 1. Is this spending for my physical well being? Am I buying food or paying rent? If yes, then spend the money on it. I need food to eat and a place to live.

Question 2. Is this spending within my budget for this week? Will I have enough money left for essentials after this spending? If yes, then spend the money on it. If not, then think about the drawbacks to face for over spending!

Question 3. Is this spending a good value for my money? Do I believe that this is a good buy? In terms of price and quality, is it reasonable? If yes, then spend the money. A little bit of research on the internet would help a lot.

Question 4. Can this spending be postponed to a later time? How urgent is this spending? If yes, do the spending at a later time.

Question 5. What is the worst thing that could possibly happen if I don’t buy this right now? Will I starve? Will I pass out? If your answer is that nothing tragic will happen, then wait until this spending comes within your budget. Remember your patience will pays off.

Question 6. Is there someone out there who is happy to give away what I want for free? Maybe there is something that people do not need and just did not get to get rid of it yet. So ask around. Everything can be obtained for free if you have the will and patience, from used laptops to scholarships!

Children will best recognize and differentiate their needs and wants when they are given the experiences and education on it. I am hopeful that the above questions will help them greatly with their learning.

Start today to enhance your child’s financial future. Teenage Budget Come to our website for more information. Giving your child an allowance with help them learn how to be financially responsible.

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