4 Great Ways to Teach Your Foster Child About Money
Money management is one of the most vital skills to have in life. It is likely that your foster child did not learn this skill from their biological parents. And, if they do not learn this skill, they may struggle financially later in life. Therefore, it is never too late and always a good idea to teach your foster child about money.
1) The Concept of Saving
Your older foster child is likely to be at that stage in life where they want to spend money in order to follow the crowd in school. Still, this may be a good start for them in learning how to save money.
You can teach them this concept by discussing whether they want their own car someday. For that, they would have to budget and save money. You can help them by going to the local bank, helping them open a savings account and filling out the relevant documents. By exposing your foster child to this process, they would have a better inclination in where to start for budgeting and saving. Then, teach them to save something as small as £5 into their savings account every month. It isn’t a lot, but it gets them into the good habit of not spending every penny they have.
You can help them out by giving them a partial amount of your foster allowance. Still, encourage them to earn it by doing household chores, and money is not easy to earn.
2) Making Right Financial Choices
Encourage your foster child to save up for a trip rather than buying an expensive bag or trainers. This way, it will be more memorable in the long run rather than investing materialistic items they will probably forget.
Teaching them how much to spend and save monthly will aid them in the long run. For instance, the outgoing amount for bills and the leftover amount to help them with their lifestyle. The ‘living’ money vs. the ‘fun’ money.
3) Credit Card
Your foster child will be exposed to credit cards when they are older. They may even believe it is free money! However, we all know this is not true.
Teaching your foster child about how interest rates work and how it affects debt can educate them the downside of credit cards. This way, they may be able to avoid this trap when they are older.
4) Living Within Their Means
Your foster child may have aspirations such as getting their own house one day. Still, with credit cards and car repayments, they must be able to afford monthly payments such as rent. Therefore, they must understand that they can not live beyond their means, otherwise they may end up in financial difficulty. Informing them about credit ratings may deter them from being financially irresponsible, as they learn that this can affect their chances of being homeowners in the future.
By instilling these principles to your foster child at an early age, they can be financially responsible, and have full control to improve their circumstances.