Tips on educating your child about managing money

23 June 2008

Educating your child on how to manage money and avoid debt is a valuable life lesson. Many children have mobile phones and an increasing number of children have access to credit cards. Unfortunately, it is usually the parents footing the bills with their credit cards.

Children can be very suggestible and are frequently subject to peer pressure to have the ';right stuff', usually the current fads and fashion trends. While no parent wants their child to be subject to teasing because they don't have the right sort of shoes, you also need to be firm that you will not grab your credit cards and buy whatever they want, whenever they want.

Explain to your children about savings and how interest works and encourage them to have a savings goal. Make it clear to your children that you understand why they want these things, any why they have to help save towards them as well.

Here are some tips to help you educate your children about hot to manage money:

Encourage your children to help out around the house and compensate them with a set limit of pocket money. If they want extra money, make them earn it with extra tasks.
If they're old enough, encourage them to get an afterschool job - be sure you're willing to do some driving if needed though.
Use prepaid mobile phones instead of plans.
Use lay-by instead of paying for an item outright.
Save loose change for things like public transport.
Identify savings goal and save money to help achieve them. These can be clothes, gadgets, or even their first car.

By educating children about how to manage money and the value of saving, you'll be preparing them for the rest of their lives. You'll also be giving your credit cards a rest.

If you're interested in finding out more about credit cards, please browse our credit cards features pages and compare credit cards.

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