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How to make your children financially prudent

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The essence of working hard at a job as a parent is to build a fulfilling career or business, earn a living and add value to the society.

But apart from these, one of the essential duties of parents to their children is to provide for their immediate needs. Professionals say these needs include basics for survival such as food, shelter, and clothing; they may also include other things like toys.

In addition to providing for their children’s immediate needs, parents also need to encourage their children to adopt good manners and money-handling habits in order to become financially independent adults in the future.

According to experts, the knowledge of the importance of hard work should be handed down to children when they are still young.

They are of the opinion that children should be taught how to make money through skills acquisition and also how to spend money with caution from their parents. This, according to them, is important not only for the present but for the future.

They suggest everyday opportunities like shopping, paying bills and withdrawing cash from the Automated Teller Machine to teach the children.

This teaching can start as early as age three or once the child knows the value of money.

Experts have recommended several ways by which parents can instill positive financial habits in the children.

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Answer their questions on money

Children are generally curious about everything around them and money issues are not left out of the myriad of things they ask questions about.

A financial expert, Mr. Olabode Adigun, advises parents not to shy away from the topic because it will be an opportunity to model the basic financial behaviour that are important for children to adopt.

He says, “To build good financial knowledge in your children, talk about how you earn money and how you plan to spend it.

“When you take your child to the grocery store, explain what prompts your purchasing decisions. Explain why the budget for a particular item is more than the other. Explain how you cut costs.”

Adigun points out that children often request things they desire, most times without a good reason.

He adds that parents should let them know they cannot have everything, but discuss how important it is for them to wait for what they want.

Teach them to give

In order to let your children know that the less-privileged people should be assisted, Adigun suggests that they should be allowed to be actively engaged in humanitarian services in school, church or the community.

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He says that it is good for children to experience the good feelings of sharing their income with others.

He adds, “You can let your children visit the motherless babies home or homes for special children on their birthday just to teach them the essence of giving.

“You should also encourage your children to regularly contribute a portion of their income to a charity or help them buy treats for the family.

Be a good role model

It has been observed that children develop spending habits right from when they are young. That is why financial counsellors advise that children should be taught money management habits which should be developed early in their formative years.

Adigun says that the best way to teach children is by showing them how it is done and laying good examples for them to follow.

According to him, when parents are setting financial goals for the family, their children should also be encouraged to do the same.

He says, “Actively encourage good spending habits. Teach your children the importance of work and delayed gratification by letting them save for an item they would like to have. This could be an item that would not be affordable in order to teach them self denial and discipline while saving.

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“Engage them in discussions and parents should show them how they save for the things the family needs.”

Involve your child in family financial planning

As soon as you lay the foundation for money management by teaching them to save, engage them in monthly budgeting in the family, Adigun suggests.

He adds, “Show your children the bills and teach them how you allocate funds to each bill.

“Allow them to have an input when making financial decisions in the family. Involve them when shopping and planning for major expenditure.”

According to him, parents should point out their children’s money management mistakes with the aim of guiding them to make right choices.

“Commend them for making good choices and be consistent with the training,” he adds.

Teach them while shopping

Adigun says parents should explain the reason for the choices they make when buying items.

According to him, grocery shopping is an opportunity to teach the children how to make the best choices.

“Let your children know how to make choices based on the quality and value of a product rather than the brand. Teach them how to make a shopping list and prioritise items to be purchased. This will discourage impulse buying and will encourage saving,” he says.

-Punch

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