The financial lessons we learn at home as children are ones that will shape how we view money for a lifetime. One of the best services we can do for our children is to teach them financial responsibility from a young age. Here are a few tips to help along the way.
1) Involve Your Kids in Household Budgeting
Although you may not want your children scrutinizing your bank statements, it’s a good idea to involve children in some of the household finances. Especially as kids get older, they need to have a realistic idea of what things cost in the real world. Whether you wish to let them know actual dollar amounts is a personal decision, but let them know the various things that must be paid for to keep a household running each month. Show them how you budget your money and what percentage of your income funds various categories. Explain to them which categories are variable and which are fixed.
2) Take the Kids Grocery Shopping
Visual aids are some of the best teachers. Show your children how to find good deals in the grocery store. For example, compare brands of their favorite snack versus a generic equivalent. Letting them see the difference between a small one of this for the same price as a large one of that is a much better tutorial than simply saying something is too expensive. Involve your children in some of the decision making—give them a “budget” of what they can spend on certain things at the store and see what they come up with.
3) Open a Savings Account
This is a great way for kids to learn how money can grow. Granted, the interest rate is small, so they won’t see a huge return that way, but they will see how money can grow when they keep adding to it. My kids all have their own Capital One online savings accounts so they can login and watch them grow and it’s super easy to transfer over birthday or allowance money.
4) Help Your Children Set Goals
It may be easier for you to buy your child a toy they desire or clothing with the latest designer label that they have been drooling over, but it will mean more if you let them earn it. If your children want an item badly enough, they can learn a lot from saving birthday money, babysitting or lawn mowing money, etc., to put towards an item they wish to purchase.
5) Teach Children to Appreciate Second Hand Items
Just because something is brand new, doesn’t make it better than something that is used. There are great deals to be had on all kinds of items in re-sale shops, in the classified ads, at garage and yard sales. Show your children how to find quality used merchandise so that they don’t always feel they must have “new” everything.
6) They Learn From Example
If you want your children to be savvy consumers, remember that they learn from what they see you do. Make smart financial decisions, and your kids will learn from you!