A lot of parents don’t realize that they can start teaching their kids about money even at a young age. The money-related lessons you teach now can have a big impact on them for the rest of their lives. If you aren’t sure where to start, check out our five savvy ways that you can utilize to prepare your kids for a bright financial future.
1- Have Them Do Chores To Earn Money
Kids will learn how to manage money at a young age if they have money of their own. This is why a lot of parents have their kids do chores so that they can earn an allowance. If you aren’t sure how much you should give them, pay them a dollar for each year of their age each week.
2- Don’t Give Them Everything They Want
As a parent, you may be tempted to buy your kids every single thing they want because you want to see them happy. However, this isn’t realistic, and most people don’t have the ability to make larger purchases on a whim. This is why you shouldn’t buy your kids every item that they ask for. Explain to them that not all purchases are a priority, and you can’t buy the item that they want right now because there are other more important things that you need to buy. This will teach them that they can’t get everything that they want now or even when they are an adult.
3- Go Over Your Household Budget With Them
If you are like most households, you probably have a budget. Unfortunately, many families choose to not share their finances with their children because they think that their kids aren’t old enough to know this information. While you don’t need to share certain aspects of your finances, like how much is in your checking account, you should review your budget with them. Show them how much money you bring in and where that money is going. This is also a great time to talk about the importance of paying bills on time, setting aside some money for doing fun things and putting money into savings every single month. Your children can use these lessons to create their own household budget when they are an adult.
4- Open Up A Savings Account For Them
You can give your kids a bright financial future by opening up a savings account for them. When you open up the account, you should take them to the bank so that they will be able to ask questions about how a savings account works and to learn how to deposit money into it. Encourage your kids to put a portion of the money that they get for chores or as a birthday gift from relatives into the account. By opening up a savings account for your kids, you will get them into the habit of starting to save money early on.
5- Teach Them About Being Frugal
A lot of wealthy people got that way because they learned how to be frugal. You can teach your children how to stretch their dollar by showing them different ways to get the things that they need. Take them to garage sales or thrift stores when it comes time to buy clothes, toys or household items. Explain to them that they can get items at these places for a fraction of what they would cost brand new. If there are certain items that you don’t want to buy used, have your kids help you find sales or clip coupons that will help you save money on these items.