Have you ever looked back on your childhood and wished you’d been taught more about money management?
From simple savings techniques to more in-depth topics like taxes and investments – it’s really never too early to start talking about money. Sure, the topics might evolve as children age, but simply opening up the door for conversation is an important step. Check out these six lessons to get the ball rolling on foundational money lessons for your kids.
1. Money Must Be Earned
Simply handing money over does nothing to teach your children the value of money – it is important that they understand that you need to work for money. There are many ways to allow your children to earn money at home – from chores to grades, it’s really up to you.
2. How to Spend Within Their Needs
This is probably the single most important money lesson anyone can learn. If someone can spend within their means, they’re flexible when salaries fluctuate or have savings if salaries disappear altogether.
3. Invite Them to See You Spend Money
Invite your kids to the table when you’re budgeting, going through bills or clipping coupons. Then take them shopping with you to include them in the purchasing process. Ask them to check prices for you and ask for their opinion when choosing between products – it will make them feel important and let them see how an adult makes purchasing decisions in the real world.
4. How to Spend Their Own Money
Yes, this includes things that you think they shouldn’t spend their money on. Giving them the freedom to make purchases will give them a sense of ownership and will teach them the value of their money. Making mistakes is probably the best way to learn, so don’t be too critical if they spend months’ worth of allowance on something they’ll forget about in a week or two.
5. Teach Them to Set Thoughtful Goals
If they have their eye set on a special item, help them set up a plan to set aside a doable amount of money each week in order to save up for it. Having a “pay yourself first” savings mentality will help them meet financial goals while still having enough money for whatever they know they’ll need to spend in the meantime. While it may not be too involved now, this process will set the groundwork for later planning that will serve them in the long run.
6. Encourage Their Questions
When your kids ask questions, it means that they’re engaged and trying to learn. If you need a moment to figure out your response, try asking them “why do you ask” in response. That way you can better understand where they’re coming from.
These lessons are just the start – what things do you consider most important when teaching kids about money management?