Well, we appreciate Christmas is just around the corner, but we love a bit of forward planning at goHenry, and given January is a matter of weeks away, what better time to talk about new starts, a chance to kick bad habits and for children to learn about money. Whether it’s impulse shopping or going over budgets, the New Year is a time to start afresh with finance, but we appreciate this can seem a little daunting, particularly when it comes to helping your children learn great money habits. Luckily, we’re here to help your kids make the most out of their pocket money in 2014 with these five helpful tips.
1. Make a budget
Teens often get money for Christmas and they might be inclined to spend it all in the January sales in one day. Try discussing what they would really like to buy and how much they want to spend on each item, thus avoiding impulse purchases they’re likely to regret later. Helping them make a budget will also show them how to manage their money and ensure that their allowance lasts through the allotted period, instead of disappearing on the day you pay it in.
2. Create ways for them to earn extra pocket money
Encouraging children to take on extra chores as a way to get some extra pocket money will help teach them the value of earning money for themselves and foster responsible spending – it may help them to think more about what to spend their money on if they equate it to the work it required in order to earn it.
3. Teach children how to keep track of their money online
It’s easy to overspend if you don’t pay attention to your bank account, so help your children avoid surprises and encourage them to check their account summary online frequently. Having online pocket money gives children a chance to see how much they’re spending and where they’re spending it in real time, meaning that they can always see how much money they have left. By giving them control of their account online, children will feel empowered and learn how to be more responsible with their money.
4. Plan ahead
If your children are desperate for the latest video game or a new phone but can’t seem to save up enough money, encourage them to make a savings plan. Help them decide how much to set aside each week and when they want to reach their goal. We know how difficult it can be for some children to save money, so goHenry has an automatic saving feature which allows children to create savings goals to reach their target.
5. Help them learn from their mistakes
Having a bank account just for your children allows them to make mistakes and gives you the chance to help them see where they’re going wrong (without bankrupting yourself in the process!). If they always have no money two days after pocket money comes in, take a look at their account with them and see if you can help them identify any reckless spending patterns. By pointing out bad habits, they can learn how to make tough decisions on what they need to cut back on and become savvier earners, savers and spenders in 2014.