When it comes to handling the finances, we didn’t get to where we are overnight with the knowledge to run a successful household. In fact, we don’t have all the right answers and learning is still important because there is always someone you know a little better than we do. Some of us learned from our parents, from school, or even by previous mistakes if you got into credit or money troubles and were fortunate to get out of it one way or another and push through to improve yourself. To pass on our knowledge and hopefully have our children not go through the same mistakes we did, and have a chat about the “wish I would have…” regrets over the years that you may have had, it’s good to teach our kids at a young age not only how important handling money is, but becomes even more as you get older.
Setting a Budget
Whether your child is going back to school shopping with a set amount of money, or handing the household finances trying to figure out how much to allot on food and gas for the month, figuring out a budget can be tough, so much in fact that most don’t actually have a budget for the house. Either one was never created, or it failed at some point, but regardless it’s kind of scary to know that most have sort a spending free-for-all, so teaching your children that you have a set amount that you can afford to spend is important.
Using Only Cash for Spending
While on the topic of a budget, a good trick I’ve learned over the years that could be good to pass on to the younger generation is to get used to using cash again. These days pretty much all purchases are a swipe of a card in store, or typing in a credit card number online to complete the transaction. The problem is, when using a credit card there isn’t really any way of stopping from charging, short of getting rid of the card, or hitting the credit limit I suppose, so a good way to limit purchases would be to use cash, and once you have run out of cash, you’re done until you get paid next, and there is no backing up with a card in the meantime. While using a card you lose that transaction feel where you actually see the money leaving your hand and going into the register, so maybe that going the cash route will allow unnecessary purchases from occurring.
Speaking of unnecessary purchases, the best way to hang onto your money throughout the month is plain and simple, reduce expenses. This can be in the form of monthly bills such as keeping the lights off and temperatures regulated to reduce electric and gas bills or cancelling cable and going with a streaming service. The rest of what you spend your money on, whatever is left after contributing to savings of course, would be spending money. Whether this is food, gas, or entertainment, there are plenty of ways to cut corners in order to save a few bucks. Reducing the amount of times, you go out to each is a huge way, by avoiding that and eating all of your meals either at home or prepared at home to take with you to work/school, you can save a significant amount.
Save, Save, Save
Now it may go lost on a child when it comes to saving, as they see money in your hand and they want to spend it, but sooner or later when they want to make a purchase for more than they afford and they save up for it, they will see the power of saving. Explaining retirement might be a little extreme, as it’s even tough to explain to those that are just out of college, but if you can get them to save money early on, it may lead to better money habits down the road.
We had it difficult up until the last decade or two, when it came to shopping, you would have to go from store to store finding the best deal, risk it not being there, or not at a good price for that matter, and often times you wonder if it was even worth wasting the gas and your time to go searching. These days it’s even easier to look over sites in seconds to compare prices before you find the deal you want and complete the purchase.