There are very few people who are in the position to teach financial skills to children the way a single mom is. When it comes to finances the single mother lives and breathes creative accounting and does her best not to let the strain of it show to a child who may internalize the stress that financing a family on your own can cause a mother.
Needs and Wants: Being savvy with finances starts long before a child ever learns what a dollar bill is. In fact, learning the difference between needs and wants is not just a part of financial intelligence; it is the foundation for character building as well. You may feel like you have to make up for being a single mother by buying your child everything you think they want, but the truth of the matter is that this only leads to raising a spoiled brat and you have to spend more of your time working to pay for it when yo could be spending that time with your child. If you can tell the difference between needs and wants, your child will have a much easier time doing it and you will quickly find that many of the material wants quickly dissipate when you both begin to realize the value of time spent together.
Savings should never cost less than entertainment. If you are spending more of your money on daily or weekly entertainment than you are on savings, you are making a huge mistake, even if that savings is going to go toward some form of entertainment later, like a cruise or other vacation. You can teach your child this by giving him or her a small allowance and helping them manage it. If they can match every dollar they want to spend on a toy with a dollar in savings, then this is a good start on the road to financial success.
Repair instead of replace. This is a disposable society, but the economy is a great reminder of why that is a recipe or failure. If something is broken in anger, simply make your child replace it. If something needs work, try having it repaired instead of buying a new one so that your child can develop this habit early.
One of the best things you can do for your child is to teach him or her to budget wisely. One of the first steps they can learn is to record all their transactions. This make it easier for them to see exactly where they have wasted money and where they could have put it to use instead.
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