How to Encourage Your Kids to Save Money

Encouraging kids to save money is an important thing parents should consider in their parenting plan. Although, it is not easy to make your kids learn all the money saving techniques, you can at least teach them few basic things that can make them disciplined money savers. The earlier you start, the better off they will be in saving and managing their finances.

Money management from young age is very important Unfortunately, money management is not taught in schools and colleges. As a parent, it is your responsibility to teach your kids about how to manage money, how to save it and how to spend it. Start teaching money management skills when your child reaches 5 or 6 years.

Majority of kids grow up without having knowledge on money management, saving and investing. Hence, these kids when they become adults start buying unnecessary stuff and become financially unstable- they are more like to get into debt. So, it is necessary that your child's upbringing is done in the right manner, giving right knowledge about money.

Let your kid start saving in piggy bank Start teaching your kid to save money in piggy bank when he is 3-4 years old. This is one of the easiest ways to teach kids about saving money. Give small amount of money regularly to your kid and make him save regularly. This inculcates the habit of saving money. Also, kids enjoy saving money in their own piggy banks.

Set goals Teach your child to set goals for saving. For instance, if your child wants to buy a video game, toy or a bicycle, you ask him to save money that he gets from you/your spouse or any other family member and buy it on his own.

Reward kids with non-monetary things Consider rewarding your kid for saving money. Much like shopping stores that offer coupons and prizes, you can offer prizes to your child. For instance, if your child doesn't spend his saved amount for certain amount of time, offer him a small reward or treat. Praise him so that he is motivated to save money in future too.

Teach the importance As your kids are growing into teenagers, teach them about the value of money. It is necessary for them to know the importance of saving and spending money wisely. Later, tell them the reason behind parents going to work. They have to understand that you have to pay money for food, school fees, monthly bills, etc. Take your child with you while you are going to shop for groceries, pay for monthly bills, etc. Let them know that you have prepared budget for expenses and you will spend within that limit.

Saving money needs discipline and motivation. Being able to save money is an important life skill, which the parents should compulsorily teach their kids. Money management cannot be learned in a day or two. It is a lifelong process. You need to guide your kids on money matters till they are mature enough to take their own decisions.

Financial Advice For The Spending Addicts

Everyone has those moments when you casually stroll around a mall, then all of a sudden, you stop in your tracks, things around you blur, and the world slowly swirls to focus on the big red sign in front of your favourite store: SALE. Everything with a percent-off tag suddenly looks so irresistible and you cannot just let them fall into other people's hands. These are times when we lose control of our spending. It may seem harmless, but feeling this way at every visit to the mall puts your income at risk and can prevent you from reaching more important financial goals. You need a few financial advice to control your spending to save your money from going down the drain.

The first thing you need to do is to set priorities. Make a list of the things you need and make sure to spend money on them first before other things. If you plan on going to the grocery store, for example, bringing with you a shopping list and sticking to it saves time and money but not putting unnecessary items in your cart. Asking yourself questions like "Can I afford this?", "Do I need this?", or "Have I checked if it's cheaper somewhere else?" can also stop you from buying on impulse.

Next is to spend within your means. One way to do this is by patronising the use of cash over credit cards. Only bring with you the approximate amount of cash you need and leave your credit cards at home. In this case, no matter how tempted you are to buy something beyond your budget, you have no choice but to walk away. Think of credit cards as your "debt cards" because you are spending the bank's money every time you swipe. Make sure your debts are a low as possible so you can pay for them fully on time. Every month you fail to pay makes the value of your debt higher.

The third tip is to make a budget diary. This can help identify the trends in your spending and monitor your total expenses. Have a daily limit on the maximum amount you can spend. If you go beyond it, review your purchases and check where you might have bought something you didn't really need.

Constantly spending more than what you earn can lead you to a financial storm. Before you know it, you no longer have savings for your financial goals and all of what you earn goes to paying your debts. If you reach this point, you can always seek the assistance of a financial adviser to pull you out of crisis.

Is Living in Your House Eating You Alive?

Have you ever wondered whether you are spending too much money on your home?

As any homeowner will tell you, running a household involves many bills, such as mortgage or rent and utilities. And of course, there is regular maintenance and repairs, even if not significant, but just for the simple wear and tear caused by day-to-day living. Taking this into account, is owning your home a viable financial proposition or too much for you right now?

To answer this question, you first of all need to find out what the definitions are of "too much" or "sufficient." Traditionally, the rule of thumb as to how much one should spend on a house has always been three and a half times your annual income, with monthly mortgage payments of around 25% of your monthly net salary. However, treat this generality with caution since it relates to the average guy on the street and not to any one individual. For instance, if you think that your job may be at risk or your car is on the fritz, now may not be the ideal time to commit to monthly mortgage payments based on your current salary. Take a look at your own individual situation before you decide.

Another important point to keep in mind is the difference between a new property's price and the total cost of acquisition. The total cost of acquisition includes the cost of the property, lawyer fees, renovations, moving costs, and miscellaneous expenses such as curtains and new towel rods in the bathroom. The hidden costs can really add up, so they should be part of your total housing budget. Don't forget to factor these into any decision you may make.

Once you know what you can afford to spend, consider buying a less expensive property. After all, since the future is always unknown, it may not be wise to overextend yourself financially.

Keep an eye on your current housing costs. If it's difficult to meet your current obligation, it may be impossible (and unwise) to commit to a larger monthly mortgage. Consider your lifestyle: is your family (and by extension monthly budget) growing? Are you planning an expensive vacation? Are wedding bells - and bills - ringing for your children? Make sure that your future financial obligations and goals won't conflict with the property's purchase, since your house needs to fit into your overall financial plan.

Buying a house may be a solid way of building equity over the long term, but before you make the investment, assess whether you can afford it.

Disclaimer: This article is for educational purposes and is not a substitute for investment advice that takes into account each individual's special position and needs. Past performance is no guarantee of future returns. Douglas Goldstein, CFP®, is the director of Profile Investment Services. He is a licensed financial professional both in the U.S. and Israel. He offers securities through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA and SIFMA. Accounts carried by National Financial Services LLC. Member NYSE/SIPC, a Fidelity Investments company.