3 tips for teaching your kids about money.
If you’re a parent, you become familiar with your kids asking for money, and it’s completely understandable for you to get tired of dishing out cash at the drop of a hat. At some point, there comes a time when your kids need to learn a few very important lessons about the value of a dollar and hard work. And trust me when I say, the earlier the better.
Are you ready to prepare your kids for adulthood by teaching them financial responsibility? Here are some tips tricks to guide you and your kids in the right direction:
Teach them how to save
Especially at a young age, kids need to know that things cost money, and the money they need to buy the things they want so badly takes a lot of hard work to obtain. As they grow, the stuff they want becomes more expensive: gaming systems, laptops, or even cars. This is the perfect opportunity to show them that earning money and putting it toward savings can help them make some of these big purchases.
Encourage your kids to get a job as early as possible. If they aren’t old enough, you can set them up with odd jobs or under-the-table work to become accountable for making their own money. When they start to see the cash roll in, help them set up a savings account and urge them to put some away. Once they work hard and earn enough to buy their first car or phone, they’ll feel a sense of accomplishment and maturity they can build off of and carry into the real world.
Show them something expensive you worked for
When teaching your kids about money, it’s important to practice what you preach. Much of your advice will likely come from your own experiences, so make sure your money moves set a good precedent for your kids. An example of seeing years of work come to fruition is buying a home. This process takes years of building your credit score, saving money, and learning about sophisticated concepts like mortgages, equity and refinancing.
That said, your kids can benefit from learning about your experiences, especially when you walk them through some of the steps. Buying a car? Applying for a credit card? Show them how to shop around, where you like to save money and about the concepts involved, like interest rates and credit reports. With any expense you pursue, there is something your kids can take away from it, so keep that in mind when going through even the smallest of purchases.
Encourage them to learn on their own
While you can guide your kids in the right direction when it comes to money, there’s a lot to be said for learning things on your own. Encourage children to teach themselves by seeking out advice on money. Reading books that dive into financial principles can drive new habits. Learning by themselves may be a better alternative to take, as we all know sometimes kids aren’t as receptive to advice coming from their parents as they grow older.
Teaching themselves about money can also increase their independence, which can trickle into their social, professional, and academic lives. Not only will it improve their self-sufficiency, but it can also spark interest in other areas that can determine their future hobbies, interests and even career paths. Therefore, take a look into some resources about finances for beginners and give them a push in the right direction.
Spending and saving are tough habits to nail down, even for adults. However, with an early start, you can develop a good relationship with money in your adolescent years. Help your kids grow by coaching them through your own financial habits and aiding new, healthy ones for them.
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