Besides that the spouses should think how to share their income and expenditures, they face another difficult task. Modern parents should demonstrate example of rational attitude to money. They wish the children not only know that the father’s car is very expensive, but they understand that money was earn hard, and money does not grow on trees. Please do not forget: you have to talk with children about money the language they understand.

Do not think that the child possesses “money intuition” since the birth. Children learn and acquire experience based on what they have seen and heard.  Therefore, parents fulfill hard task – to teach the children in reasonable approach to money. So, the family councils are the best way to explain the children what does money mean.

How to make wise decisions and right choice, how to use means to get what you need and how to save required amount for daily needs and for a rainy day?

When you let the children into sacrament of finance management, please do not forget that they are different. They are characterized by different temperament, level of development, ability to learn, level of perception and curiosity. Hence, their attitude to money will vary as well and capability to administer money.

Financial lullaby

Try to find time when the family meet together to discuss success and failure, share plans. It is right time to start conversation about the family budget – what needs are priority, where to pay more attention and what you can wait for. Do you need to buy roller skates to your son now? May be, is there something more important and urgent? In this case, roller skates you can buy next month. You have to discuss both expenses and revenues in the budget. Let children take part in planning of the family budget on equal terms. Let them feel themselves as equal partners. Advantages of such family councils are obvious.

“And Timur’s parents have bought him the TV games attachment …,” – something like that the parents hear very often. How to explain the child financial situation of your family?

The child can understand that expenses in your family depend first of all on the family’s income, situation and personal needs, and you never ever rely on other men and women in the family budget planning issues.

Family councils should be held openly. The children should have an opportunity to express their own view and to be confident that the parents listen to their statements. May be, it makes sense to allocate amount by 100 soms more to daughter this month? The daughter will go to concert with her friends. However, next month you will redistribute pocket money. May be, your son who saved major part of money he planned to buy roller skates, would ask the parents to give deficient amount? So, purchase of next toy will be not just a caprice. Your kid will understand why his wish will not be fulfilled currently. May be, he will get what he desires but later.

It is better if such discussions will be held with fun and in free environment. You discuss money matter with the kids, and not with the financier or bank clerks. So, do not put responsibility for solutions on your kids. These decisions will be made by you, finally. It is just enough to inform them about situation without going deep in details. Do it is friendly form without tension. And remember: there are no two similar families. Each family solves monetary questions in its own way. Therefore, common rules do not exist.

Certainly, the parents should know well monetary issues and have skills to manage family budget. Example you demonstrate as specialists on family budget planning will determine much attitude of your growing kids to money.

During the family councils, you can use situation and explain the kids why it is preferable to save money with specific aim. You can explain that that non-preferred purchase can be postponed. But on other hand, satisfaction when this thing is in your hands will be much higher rather in case of momentary meeting of need. As example you may discuss some articles the family would like to buy now or in the nearest future. It can be whatever you want – from new personal computer to visit to café or travelling. Then, you can discuss ways how to achieve desired things. For example, it is possible to buy new TV-set if you reduce current costs (reject of visits to café) or increase income (find additional work).

How does pocket money work?

It is obvious that the child shall have pocket money. But it is important – question of pocket money is also crucial as well as question of the family budget planning. Only pocket money plays key role in financial education of the child.

Pocket money – it is always certain amount, which is paid on regular basis. It does not depend on requirements of the parents or duties of the kid. It is easy to identify a size of pocket money through discussion with the child his/her needs. Amount shall be sufficient that the child does not ask additional amount or borrow money from the classmates. Do not link money punishment. Some parents use money as stimulation for timely and quality fulfillment of household duties. Some parents, but not you. Do not insist the kids that everything is sold and bought. It is not truth.

The parents must praise the child every time he/she rationally administers pocket money. The child must know what he/she is doing well, and what he/she could do better. It is not worth to revise size of amount for pocket expenses, if the child made a mistake and money was not enough. It is better to learn lessons while they buy chips, chewing gum, visits to cinema or parks. And not undisbursed loan and unsettled debt and so on.

Do not put pressure on the kids. You can give advice, but do not give an order. Strict control will sooner or later bring to situation that the children will think about money very seriously, lose self-confidence and be reticent and tell lies.

It is not worth to remind them all the time about mistakes they have made. However, it is useful to make children familiar with financial status of the family, definitely.

Piggy bank of wishes

Teach the children to save, and not to waste money. Explain the children that money can earn money. You can even fix symbolic percent for money the children did not spent and continue to save. Help the children to keep money records. For instance, you can collect receipts of purchase (ordinary envelope can be used for these purposes) that children see how and where money they saved have being spent.

It is your duty to teach the child right attitude to money. Your future, future of your children, grandchildren and even great grandchildren depend on how you succeed with this task. So, as we say, it is up to you.

Remember, that the parents who postpone solution of this problem, may pay for mistakes (both material and moral) of their kids for whole life.