One thing a lot of parents don’t realise is that for most of your children’s lives they are brought up under your wing, then when they decide to move out of home they are suddenly out in the open exposed to the world of bills and credit cards with very little idea of how to manage these financial situations. We wouldn’t send our soldiers into battle without training and therefore it is your responsibility to train your son or daughter before sending them into the real world. The message I am trying to send is not to pay your child’s bills for them, but educate them on how to best budget and plan for when they start receiving bills. By teaching our kids a few simple tricks we can help them to avoid hard financial times in the future.

When your children reach the age when they start thinking about moving out of home; take some time to explain what bills to expect when they move out of home. A lot of the time when people first move out of home they are overwhelmed by the sudden commitment to paying for Rent, Gas, Electricity, Mobile Phones and all the other bills that come with living out of home. Explain the benefits of turning of electrical products when they are not being used and the impact shorter showers can have on their water bill; the key message is for your children to understand and manage their bills so they don’t fall behind on their bills.

### Rough Budget

I am a strong believer that when it comes to budgeting you need to keep it simple. I find the easiest way to draw up a budget is to follow these steps:

1. Make a list of all your bills ( the type of bill and amount, for example; Phone Bill, \$50),
2. In the next column write the frequency of the bill,
3. Multiply the amount by the frequency to get a yearly figure, for example, monthly phone Bill (\$50) equals\$600,
4. Total the yearly column to get your annual expense total,
5. Divide the total by the number of pay periods you have in a year, if you get paid monthly divide by 12,

You now have a simple rough budget that you can compare to the frequency. You now need to get in the habit of putting expense amount away each pay period for when the bills are due.

### Needs and wants

One of the essential lessons I learnt when I moved out of home was the difference between wants and needs. For example, I want a Bose sound system but I need toilet paper. When I moved out of home I quickly learned the difference as money which should have been spent on food was actually spent on other items such as games. Teach your children the discipline of knowing that your needs must come before your wants and your wants should be purchased with the money that is left over after the bills have been paid. If there is no money left, the wants need to take a back seat and wait until next pay day.

These 3 simple and nearly trivial tips can make a world of difference to your kids, at the end of the day when your children move out of home you want them to be safe and more importantly happy.