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Budgeting not only helps in times of economic downturns. It is good for everyone at all times. It helps you control your life and eliminates stress.
- The first important thing about budgeting is it is a skill parents need to share with their children. Children need to be taught safety and wisdom with money. Both will affect their lives.
- Help your child learn how to earn and save. Start an allowance early on with clear tasks for earning money. Like an employer, do not give the money over as a matter of course; make sure the child has done what is expected of him/her. At the same time open a savings account with you child and show how money can be saved. It is important to help your child understand that some things s/he wants can’t be gotten right away but can be saved for. Earning and saving for “goodies” offers children a real sense of accomplishment and a great life lesson.
- Also help teach your child about spending. Have your child pay with cash. Start by giving a young child a dollar and let him/her find out what that amount of money can buy. Also have you child pay for two or three necessities him/herself. This helps them discern the difference between what is a “need,” like clothing or toothpaste, and what is a “want” that can be put off until later. Finally, be sure to talk about your own finances, not letting your child think everything comes to him/her with no worry or consideration.
And, finally–
Save!
- Put away your salary increase or COLA increase as though you never had it.
- Trick yourself by making every check or debit deduction you have rounded up to the next $5 increment. For example, $13.33 becomes $15.00 that you subtract. The extra that shows up at the end of the month can be transferred to your savings account.
- Hoard one particular amount of cash, whether it’s a quarter or a five-dollar bill. At the end of the month, deposit in a savings account.
- Pay yourself—instead of someone else. If you mow the lawn yourself, you have saved yourself $20 to $40. Put it in your savings!
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