Spending an extra few hundred Dirhams here and there on your kids may not feel like much today, but raising financially irresponsible kids could cost you (and them!) a lot more later. Whether they just won’t move out because they can’t afford their own place, or they’re neck-deep in credit card debt and begging you for a bail out, there is a high price tag for kids that don’t learn basic financial life skills early on.
Are your children already displaying signs of financial responsibility? Here is what to look out for and what you can do:
They think that your plastic card is magic.
Your child might not quite understand how money works, especially if they depend on you and your card toget stuff. Kids need to learn that plastic isn’t as “fantastic” as it may seem. There’s no “hocus pocus” going on because cards use REAL money to buy things.
The best way for kids to understand and value money is to have and manage their own. If you haven’t started giving them pocket money, maybe it’s about time! Set up and automate their Allowance through Verity where they can start managing it. They will start understanding that cards use real money when they start spending their own on their Verity prepaid VISA debit card!
They have little to no Savings.
You may not be giving your kids a large allowance, but that doesn’t mean they have to spend it all! If they never put any money aside, that’s a strong sign they’re not learning the importance of saving.
Teach them how to save for things they want by helping them create Saving Goals. Start with short-term goals like money for online games or a low-costing toy. Once they get into the habit of saving, add longer-term goals like a new phone or a PlayStation.
Get them excited about saving by having them add Saving Goals on the Verity App. Once they receive their Allowance, they can fund their goals and watch as they get closer and closer to achieving them! Bonus: Make saving a family activity by setting a Family Saving Goal through your parent app and assigning it to the whole family.
They’re deaf to the word “no.”
If your kids grow up used to you saying “yes” all the time, they’re not going to learn how to cope with the inevitable “no’s” that come with adulting. Learning how to handle hearing “no” will help them discipline themselves.
Next time they ask you to buy them something, take it as an opportunity to teach them that money is earned through work. Set up Chores or Tasks they can get paid for on the Verity App once they complete them! They can be household Chores (taking out the trash, setting the table) or behavioral Chores for habits you want to instill in them (reading, exercise.)
Just don’t forget: if they run out of money, do NOT bail them out! If you do, they will get used to coming to the Bank of Mom and Dad whenever they need money.
They’re constantly emptying your wallet
We usually borrow money for daily expenses when we are living beyond our means. In other words, if kids are constantly taking money from you, they’re most likely spending more money than they’re earning. If that behavior lasts into adulthood, it can lead to irresponsible debt.
Help them create a budget based on the 50/30/20 budgeting rule: 50% of their earnings should go towards Needs or things we need to live and survive (clothes, food, water); 30% towards Wants or nice-to-haves (toys, games); and 20% towards Savings. Once it’s all set up, you can both track their saving and spending on Verity!
They must have everything they set their eyes on
This one is important, and not just to manage their need for instant gratification. They may be buying things to keep up with friends’ spending habits, which can skyrocket theirs. Buying the same cool sneakers as their BFF is a lot cheaper than some of the adult equivalents (sports cars, houses, watches), but it’s important to address early on.
Help them learn to control their spending with Verity’s prepaid VISA debit card. They can load it with an amount of money they have budgeted for spending to help them stay on track.
Whether or not your kids show any of these signs, it’s never too early (or too late!) to start teaching them the basics of money. Give them their own money to learn how to earn, save, and spend through Verity where they will get their own money management app and prepaid VISA debit card under your guidance.