With the season’s festivities soon to take place and a New Year on the horizon, for many of us it’s the perfect time to make a change. The season of giving may have put a bit of a dent in our bank balances and New Year’s Resolutions will soon be made, with not a few focused on pulling our finances, as well as our bodies, back into shape. For children, this can be a great time to be empowered to learn a bit more about how earning relates to spending and saving, so here are a few tips to help your family maintain your financial resolutions for the New Year.
1. Anticipate spend
It’s very easy for teens to get caught up in the whirlpool of spending, probably because they feel the need to continue spoiling themselves even after the Christmas tree has long disappeared. It’s important, as a family, to try to anticipate potential spend at the start of every month and avoid overspending, so why not encourage your children to consider particular purchases that may be coming up in the New Year.
2. Necessary vs. Unnecessary
For adults, paying bills and putting food on the table is the clearest example of what we should prioritise in terms of our spending. However, for children it can be a little bit more difficult to differentiate between necessary and unnecessary spend. When thinking about New Year’s resolutions, it’s good to consider ways to help them so they can try to grasp an understanding of what’s important and what’s less so. Try to make sure they spend what they have earned and saved on what are necessary items and then encourage them to prioritise what to purchase from the unnecessary list!
3. Family meetings
Sitting down as a family at the start and/or end of every month can be really helpful. Talking in an open and constructive way makes it easier for children to develop an understanding of money and help answer questions that they’re bound to have. Analyse last month’s results; did it work out as you planned or are there things you’ll try to do differently next month? Be honest and transparent with your children and you’ll find it’s not only a fantastic way to empower your children to learn about money, but you’ll find the positive knock-on effect on other areas of your family life too.
4. Quality over quantity/Reward Incentives
Giving children money as a reward for doing chores is a great example of how incentives can motivate children to reach their goals. Encourage them to set themselves both short and long-term savings goals and maybe even stick a photo from a magazine or catalogue on their bedroom wall of their goal purchase so they can remind themselves what they’re working and saving towards. Having the ability to save be that for a specific purchase or not, is a valuable trait to have and this will ensure they get into the habit early.
5. Tackling ‘Overspend’ head on!
Children are bound to make mistakes; after all, we all do, but the beauty of goHenry means children makes these mistakes in a safe environment and that they learn through doing. If overspending does happen, it’s a great opportunity for your children to learn, so why not sit down with them and review why that has happened and empower them to consider ways they could avoid this situation happening again?