Tips to Teach Your Kids Budgeting Habits – Money Lessons

Everyone must know the value of money and parents should inculcate money management for kids as they will learn to value money in their lives. It is important to build the child’s knowledge on how to save money and the importance of money. Teaching budgeting and money management skills to kids from a younger age will help them develop better money management habits in future.

Let us look at some ways by which you as a parent can teach your kids on how to handle money. 

Giving allowance

Children learn about money through various ways when they see parents make a transaction, when they get salary and when they purchase things, but a kid will understand what money truly is when you tell them about it. So the best way to start teaching kids about money and budgeting for kids when you give them their monthly allowance.

Allowance acts as a tool for teaching kids how to save when they want to purchase something with their allowance money. They also learn that if they spend the whole money in advance before the month ends they won’t have any money and will learn to budget. This tool of allowance will come a long way as it shows the consistent flow of money, encourages savings and spending money wisely.

Participation in money matters

As the kid grows older they are building up their knowledge about money and how money should be spent. So they have a working knowledge that money is very important and must be carefully spent. Since they have learned to budget and spend their allowance wisely they are now ready to make small contributions to family finances.  Give your kid a small task to manage some household finance like giving a home worker their salary and tracking their attendance. This exercise builds the child’s confidence in managing money and prepares them for their future when they have to run their own household.

Involving the kids in family money matters will bring them a sense of the financial situations at home and how the expenses are managed and how much is saved. This exposure brings the child to understand money matters more and the value of money.

Making savings account

When allowance is given and your kid has money left at the end of the month encourage them to save. You can encourage them to save by letting them know after collecting a sufficient amount they can purchase something or that it will be the money for their college education. This encouragement of saving will make the kid want to save and put in some amount of money every month. For saving money there must be some money left this makes the kids spend on a limit so that they can save some money and will cut back on things they don’t need.

After introducing saving you can teach your kids how savings account works and can open a savings account. Letting them know they can put money in the bank and will build interest, would be safe and they can withdraw the money whenever necessary.

Spending it right

It is important for your kids to know what is expensive and what is worth buying and when it is necessary to spend. When you are going grocery shopping take your kids along with you and let them observe. When you are choosing a product with different prices bring to the child’s notice on why you are choosing that particular one over the others, be it the price quality or quantity. It is important for them to know what is suitable to buy.

It is also necessary to make them aware of the coupons available and how to identify which products have offered so that they can make a smart purchase. After they have seen you shopping for grocery encourage them to go and make purchases for home needs and see if they are on the right track if not take them again with you and educate them on smart buying.

Track the expenditure

Giving your kid money just isn’t sufficient you need to guide them every step of the way and when they come to you for help do it. After the month ends, sit down with your kid and track their expenditure and monitor what they have been doing. When you have a look at their expenses make necessary notes on where they have gone wrong like over spending on one item and frequent expenses they don’t need. You as a parent must ask your kids to cut down on the unnecessary and use the money wisely.

Monthly meetings

After all this process it is important to know to keep the finances in check, it is easy to teach someone to budget but it is more important to see if they are sticking to it. So every 2 months make it a habit to sit down and see that there is a fair usage of money and make changes if necessary.

Summing up

It is important to inculcate in your child how to spend money and manage it from a younger age itself so that they can grow to be responsible adults and can manage their own finances later on without much trouble.

6 Simple and Useful Tips for Everyone to Avoid Insurance Frauds

Insurance is a need. Unless you live in a utopian society where the state provides you with everything, you need insurance. You need life insurance; you need insurance for your car, for your home and for your business.

But choosing the right insurance policy can be hard, especially because there are many fraudsters in the guide of insurance agents who rip naïve customers off.

Here are the tips that you’ll want to follow:

Ask to compare

Tell the agent to compare his company’s policy with other policies.

Wondering why you should do that?

This stops the agent from making outlandish claims. Insurance agents often make claims that are half-true. They purposefully conceal information from their customers. Customers can extract information from them if they tell them to compare their policies with other policies.

Let’s say an insurance agency reveals the extra costs associated with deductibles. A customer can refer to this and ask the insurance agent whether his policy comes with any hidden cost. When confronted this way, agents are pressurized to tell the truth.

Additional policy coverage

This is a technique used by insurance agents to pocket commission. They sell customers additional policy coverage, which the customer may not even need in the first place. It’s called policy sliding.

How to make sure that your insurance agent is not aiming for policy sliding? Ask him to hand you all the papers. Then take those papers to your lawyer. He’ll tell you whether there’s any additional policy coverage.

Sliding is a fraud. If an insurance provider is accused of policy sliding and if the ensuing investigation proves the provider was guilty, it could end up losing its license.

Insurance churning

Akin to policy sliding, insurance churning is a method, using which dishonest insurance agents profit off of inexperienced customers. Insurance agents insist their existing customers to upgrade their policies. What they don’t disclose is upgrading the policy could cost you all the cash-value that you’ve built up over the years.

It’s happened with a lot of people. They felt surprised when they discovered their previous non-upgraded policy was more than sufficient. Upgrading translates to moving to a pricier plan, enabling the agent to earn more commission. So if the agent advises you to upgrade your policy, make sure it’s a useful advice and you really need to upgrade it.

Auto insurance scams

Auto insurance is susceptible to scams. Here are the top scame categories that every auto insurance buyer should be careful of:

  • Intentional crash: It’s also known as crash for cash. Insurance agents, with the help of their companies stage accidents, so that the customer is held responsible. In this type of crash, the driver deliberately causes the customer to hit the backend of his vehicle.
  • False representative: The insurance company might send a fake representative when a customer is genuinely involved in an accident. The representative sends the customers to a shoddy doctor or a repair-shop to squeeze money out of him.
  • Faking injury: In this type of scam, the fake victim shows up with false injuries. They often get sketchy doctors involved to buttress their claim.

Take help of an experienced attorney if any of these happens. Attorneys are experienced. They can identify whether the agent’s offer is genuine or fake.

Ask for receipt

Once again, a lot of people fall prey to it. Insurance agents convince them to the extent that they forget to ask for a receipt. At times, customers ask for a receipt but the agent tells him it’s not that important. Beware! If your agent tells you insurance policy receipt is not that important, he’s most likely to be a fraudster.

A receipt is the evidence that you have cleared the payment. Agents often discourage customers by saying getting a receipt will take days. While that’s true, the receipt is the proof you have a contract with the insurance company and the contract was realized by the agent.

Oftentimes, agents hand over receipts which were issued by fake companies. Make sure the receipt you obtain is from the company with which you are entering into the contract.

Up coding and documentation

Have your insurance contract documented and stop up coding. Similar to receipts, documentation is also a proof that the customer has entered into a contract with the insurance company. It also categorically states coverage and limitation. By having their policy documented, customers can prevent being billed for nonexistent services.

Documentation is essential for all those who are buying health insurance policies. It prevents up coding. In a technical sense, up coding is a situation wherein a person is billed for health insurance services he didn’t receive. When all the key details about the policy are documented, up coding is prevented.

Summing up

Insurance frauds amount to billions of dollars being siphoned off from public treasury and from people’s pockets. Following the six tips, discussed here in this article ensures that you won’t make mistakes and purchase the right insurance policy.