5 Tips for managing your child's THR money, guaranteed not to be wasteful and useful

foto: freepik.comfoto: freepik.com

Unfortunately, sometimes parents go crazy by not using their children's THR money wisely.

Brilio.net - One of the moments that children look forward to the most during Eid is getting THR (Holiday Allowance). Recently, children are called their parents' investments when they get THR from relatives and family. Parents will take advantage of their children's income during Eid al-Fitr

Considering that their age does not really understand the value of money, these children often hand over their THR to their parents. As a result, parents will save their children's THR money.

Unfortunately, sometimes parents go crazy by not using their children's THR money wisely. As a result, the THR money that had been collected from relatives was spent very wastefully, and ultimately made the child and parents regret it.

As a preventive measure against this feeling of regret, parents need to know various tips for managing their children's THR money. Therefore, wise planning is needed to manage THR money so that it is not wasteful and is useful.

Tips for managing children's THR money are basically the same as adults managing money planning. However, here parents have a greater role and responsibility in educating their children in managing finances. Detailed , planned management of THR money can have a positive impact on the child, both in the short and long term.

Understanding and teaching about managing money can also be a place for children to practice preparing for various financial needs in the future. This is useful so that they do not easily waste money in the future. Measurable planning and management can provide financial provisions that they will definitely need in the future.

Here are 5 tips for managing your child's THR money, guaranteed to be economical and useful, as reported by brilio.net from various sources, Monday (84).

photo: freepik.com

The most important step in managing children's THR money is to teach children about the importance of managing money from an early age. In the process, children need to be explained about the concept of saving and managing expenses so that the THR money can still be useful for a long time. Then children can be taught how to make a budget and also more detailed financial planning.

So that children and parents understand what needs and desires both parties want to achieve fairly. Financial education is also useful for instilling an understanding that saving is actually for a better future. If it is not instilled early on, children have the potential to easily waste money.

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Setting goals is the next tip for managing your child's THR money. Clear goals can provide children and parents with ideal planning. Will the THR money be used for primary, secondary or tertiary expenses? Parents also function as mentors for their children, so that they are able to understand what is more crucial than managing money.

Apart from that, clarity of goals will determine the direction of more focused budget planning, this is useful as a step to prevent mistakes in making decisions in the future that cause children to regret it. If the goals have been agreed, parents can collaborate with their children to realize the goals they want to achieve.

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The third tip for managing THR money is to arrange the division between savings and expenses. Because the amount is limited, parents need to be smart in directing their children in managing THR funds for daily needs, or special expenses, or long-term savings.

To make it easier for both parties, parents can determine the agreed percentage of planned expenses. So the existing funds can be divided into two needs. This concept is able to educate children to better train themselves in balancing needs and desires. The hope is that in the future the child will be able to reap the results they have started from an early age.

photo: freepik.com

Involving children in decision making in managing THR money is an ideal step in educating children about financial matters. All the money that has been collected could be wasted without the right decisions.

However, if decisions in managing finances can be prepared in a planned manner, it is guaranteed to be more economical and beneficial in the long term. Parents and children can discuss this matter together to create a final decision that is agreed upon by both parties.

This concept teaches children that they must be ready to accept the consequences of every decision they choose. Parents are also able to understand the child's needs which must be met in the near future. Shared responsibility is the key to creating good finances.

The final step in managing children's THR money is by teaching them to invest for the future. Amid the progress of the digital financial era, digital investment or savings can become a reserve resource that can be taken if needed at any time.

Future investments need to be prepared from an early age, so that children have sufficient provisions for their future needs. They can try several investment options, such as mutual funds or deposits.

Investments can be made with short-term, medium-term and long-term planning. This can encourage children to prioritize long-term investments that can help their financial condition in the future.

(brl/lea)