With summer vacation coming up, parents are already thinking of ways to control their kids’ spending through the care-free days.
The truth is that summer vacation also provides a great opportunity to teach your children the value of money, the importance of keeping an eye on spending and that with freedom of choices come responsibilities.
It’s the time of year when kids are off to adventures and exploring the world. They go out with friends, go shopping together, enjoy the beach or the mountains and simply have fun in their own unique way. For most kids their adventures would include buying ice-cream, snacks, a small crazy gadget or even clothes.
But how can parents make sure that their kids are not overspending and if that they can tell the difference between an item they need and an item they’ll just buy and never use? We’ve summed our three suggestions to start teaching your child about money:
1. Give them a fixed allowance for the week
Even for adults it’s hard to plan expenses when you don’t know what money will be available to you. If up to now you’ve given your child money for certain things (to go out with friends, for cinema tickets or to get a new phone case), consider giving them a fixed weekly allowance. Getting a certain amount each Monday will give your son or daughter the opportunity to plan their expenses. It will probably be hard in the beginning. You may reach a situation where your child wants extra cash on Friday and you have to decide whether to give them what they want or teach them a hard lesson by declining. However, in the long term your child will learn how to better plan expenses, decide on which purchases to make and which to skip.
2. Teach them how to make a budget and how to keep an eye on their purchases
In order to avoid the mentioned uncomfortable situation, why not teach your child how to create and keep a budget? You can start with some basic categories such as “Snacks”, “Tickets” and “Going out with friends” and have your child decide what part of their allowance they would spend for each category. Writing everything down is important since it would help build a habit. Encourage your child to review the expenses made during the day and put them into the categories you’ve written down together. There are also numerous apps, in case your child has a smartphone, to make keeping track of things as easy as possible.
3. Offer them the freedom to buy what they need but keep an eye on their spending
Our last idea will give your child freedom to make purchases and give you an ease of mind that you can check their expenses instantly. Issuing an additional debit/prepaid card for your own bank account and giving it to your child will allow you access to the financial transactions made and you can keep calm that your son or daughter will not lose any cash while going on their own adventure. Cards are becoming the preferred method of payment across Europe, so why not give your child one and create the habit of using it? The LeuPay Twin cards allow you to set limits per transaction, per day and per week and also reflect each payment instantly in the transaction history of the account owner. That way when your daughter says “I need 30 Euro extra for a dress.” you know she’s not spending it all in Starbucks. You can also allow or block certain types of transactions – POS payments, ATM withdrawals or Online purchases.
Teaching children about money helps them grow into responsible adults. For them, learning how to handle personal finances, will be a huge opportunity to manage not only their expenses but also their income, ultimately giving them the skills to create a better financial life.
Our advice would be to start sooner rather than later. To do so, we’re giving you the LeuPay Account and LeuPay Twin Cards for free. The rest is up to you!