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Kids are very special to have around the house; however, they need to be groomed to become better and more capable in the future. Kids spend a lot on sweets, pastries, games and comics and if not curbed on time, this may cause them to spend a lot in the future on basic house hold items. Teaching kids to balance spending and saving is a skill that every parent must inculcate in their children from when they are age two or three years. It will be too costly for parents and the kids, if parents do not teach their kids how to spend and save. So how do we teach our kids to save and spend?

Saving

During their early years, it is likely that these children will be given cash as a gift or as a reward for doing something right. Buying or getting them a piggy bank will be the first step to teaching them to save. Ensure that from every cash gift or reward, your kid should be made to save a particular percentage. This percentage depends on what you decide to set for your kid. After a period of time (Three months, Six months or One year), you should get the total amount of money in the piggy bank in the presence of your kid; count and allow him to decide what he wants to use this money to buy. (Note do not allow your kid to spend all the money, you can still keep the normal percentage). This serves as a reward for saving, but above all will help your kids to know the importance of saving and also to cultivate the habit of saving.

Budgeting

After "harvesting" the money from the piggy bank, kids should be allowed to buy whatever they want to buy, with a certain percentage of the money from the piggy hole; however they should be made to a budget by making a list of items they wish or want to buy. After listing what they want or wish to buy, parents should help their children understand the difference between needs and wants. Needs are those item that are very important which parent should encourage their kids to go for. Want are those things they desire which may not be at all or useful for now.

Negotiation

Kids need to go and experience what it entails to buy. Take your kids to stores or market and watch them buy. During this process they learn the act of negotiation. If the price of a brand is on the high side tell them or make them realize that they can go for a cheaper and equally effective brand. Help them to always get the best deal or at least a better deal.

Other things to teach your kids is never to imbibe in the habit of using credit cards regularly; make them realize that it make them lose a lot when they buy on credit.

Assist them in making research into particular products before buying so that they won't just waste their money.

An average adult spends money on unnecessary things; we need to help our child so that they won't be like this. Teach them how to save, budget, and negotiate, and they will be wise with their spending.

Learn more about this author, Adebowale Ajose.
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