Children learn many things as they are growing up, both at home and at school. There are many arguments as to what the most important thing that they can learn is, but budgeting is something that is so important that all children should learn it. There are some lessons in school teaching it, but it is also important for parents to reinforce the message so that children have a good understanding of it. But why is it so important?
Avoiding unnecessary debt
Debt is something which many of us have and it is seen very much as a normal part of modern life. Although some debt is okay as we otherwise would not be able to buy houses or go to university, a lot of debt could be avoided if we managed our money better. If we understand the principles of budgeting from a young age this could really help us. Understanding how to make sure that we have enough money to cover all of our bills and basic needs before we spend money on luxuries is such an important concept to grasp as well as understanding about types of debt and when it is appropriate to borrow money and when it is not.
Being in debt can be a problem in many different ways. It can be a source of stress, knowing that you owe money. It can be difficult finding the money to cover the cost of the repayments. The cost of the debt could mean that other things are unaffordable and it could mean going without heating or food in order to afford them. Many of us also borrow money without really needing to. We spend too much money on things that are not necessary or overpay for things and then end up having to borrow to cover those costs. Understanding how to only spend the money we have and how to prioritise spending can help us to avoid unnecessary debt.
Having financial stability
Knowing that you are in control of your money is a great feeling. Whether you have a high or low income, knowing that you are living within your means is great. It is even better if you are able to save a bit of money each month as well. Whether you are a high or low earner, budgeting is really important. It is just as easy to get into debt if you earn a lot as if you earn a little if you are not careful with what you are spending. If you income is higher you tend to have more borrowing options available to you and so it can perhaps be even easier to get into debt and then start to struggle financially.
Knowing that you are managing your money properly and that you have enough money to cover all of your bills each month can be a great feeling. Having some savings behind you can be even better so you know that if you have an unexpected expense then you will be able to pay for it without any stress. Having that financial stability, whatever income you have can lead to a sense of freedom and avoids the stress that debt can bring.
Avoiding financial stress
Financial stress is something which we have probably all had at one time or another. Being able to avoid this by knowing how to manage your money can be fantastic. Sadly, many marriages break up because of problems with money. The stress of debt can cause a relationship to break down. If all children understand about budgeting and the importance of managing debt well this should avoid many people getting into this situation in the first place. This could help people to no longer argue about money and it could help relationships to last much longer.
All stress can be detrimental to our health. It can lead to us being more likely to get unwell with physical diseases but also with mental illness. This can lead to all sorts of problems with missed working days and possibly then lower pay which can make the problem even worse. It can also make our quality of life poor and even shorten our life. So if we can avoid stress then we can have a much better life and just learning about how to budget and the importance of budgeting can make a huge difference.
Obviously there are many important things that children need to learn. However, money is such a fundamental part of society and such an important tool that it is so good to have the necessary skills to be able to manage it. Being able to be in control of money rather than letting it control you is so important and can make a huge difference to happiness and health. So starting with understanding basic arithmetic, money maths and then balancing a household budget is something that every child should be taught.