Teaching your children good money habits is incredibly important. Money is an essential part of our society; we need it to eat, live, stay healthy, and even to do some fun things.
As adults, we know money is essential, yet it is shocking how many parents don’t prioritize teaching their kids about money. The truth of the matter is that if you don’t teach your children about money, they’ll get their advice from other places.
Ways to Start Teaching Your Children Good Money Habits
It is never too early to start teaching your kids to be financially savvy! It will allow them to be set up for their future and make wise choices as they grow.
Talk About Money and Set a Good Example
The first step to teaching your children about money is to make sure that you are good with money. Kids will always look at the way you do things over what you tell them. This is why we have to lead by example and not with instruction. If you spend your money frivolously, then you can expect your kids to do the same.
Besides this, you also have to bring up the money conversation. It is good to see what your children believe about money and how they see it. As parents you can influence the way they think about money.
Invite them into your and your spouse’s conversations about money. Of course use wisdom here; kids should not be involved in the big serious chats, but the smaller ones will help them. For example, if you are planning on getting a dog, weigh the costs of the pet while the kids are there and ask for their input. It will teach them that they have to plan before they can make any financial decisions
Play Money Games With Your Kids
There are many ways in which kids can learn about money, and the best ways are when they do not feel like they are learning. You can make up your own games using coins and jars, or you can even pretend to be a bank and walk your kids through different money processes.
There are also plenty of board games that teach kids about money. Playing these games will help kids understand financial concepts without them feeling like they are being forced to learn.
Allow Them to Earn Their Money
It is extremely important for kids to earn their money. I think this has been lost in many parenting styles because parents want to give their kids the best life and so just fund all of their expenses. This can backfire, because in the real world, nobody is going to give them money for free.
All kids should get an allowance, because this helps them to budget and take care of their own money. In order for them to get this allowance, they need to work for it. You can write out a list of chores for each child, and if they have finished their chores, then they will get paid at the end of the week.
You should also create opportunities for your kids to earn more money. This will also teach them that they need to work for what they want. If they are planning on buying a new game or clothes that are out of their budget, attach prices to different chores or activities and pay them as they complete them. This way they have the opportunity to get what they want, if they are willing to put in the effort.
Related Podcast: How This Mom Is Teaching Her Kids to Become Entrepreneurs
Teach Your Children About Saving
Teaching your children about saving money is not going to be something your kids will inherently know or want to do. From an early age, it is one of the best skills you can teach your kids.
Saving isn’t only about money; it is also about planning and delaying gratification for a bigger picture. Your kids will be far ahead of the pack if they master this early. You can use the 70:20:10 rule as a start: 70% to spend, 20% to save, and 10% to be given away.
Whenever your children receive money, they need to know that all of it is not to use. Depending on their age, you can use a jar or a bank account to deposit their savings into. They should be the ones to deposit their savings so that they learn to put money aways for later.
Related Podcast: How to Make Your Kid A Money Genius
Giving Away Money
Money can so easily have a hold on all of us, including children. Kids are inherently selfish and they want things only for themselves. The sooner we can move them past, this the better.
Giving is linked to many benefits. If giving is instilled as a habit from an early age, then your kids will grow up being generous people. Generous people are happier people. Help them decide where they want to give money to and allow them to do this every month.
Pausing Before Buying Something
Children need to know how to be patient before spending their money. Instant gratification and impulse buying is a major problem with the younger generations. Parents should make it a priority to train their kids out of this mindset because things in life just don’t happen instantly.
People get into a lot of trouble by buying things on a whim. If your child wants to buy something, always ask them to wait and think about it first. If they still want it in a week or a month, then they can go ahead. More often than not, they won’t want that thing anymore, and will have saved some money in the process.
Using Money Management Apps
Just as adults use money management apps to help them keep track of their money, our kids can use them too! There are so many apps that can be so useful to teach your children about money and how to use it. Here is a list of some great money apps you can use with your kids:
- Acorns – can help your kids learn to invest any spare change they have for the future.
- Bankaroo – is a virtual bank designed for kids.
- iAllowance – will help your kids track their allowance and set savings goals.
- FamZoo – helps kids manage their finances, and you even get a bank card to go along with it.
In Summary
Every parent wants their children to be set up for success in life. Teaching them how to be wise with their finances is one of the best gifts you can give them. We hope that you’ve found this article useful in building your plan to help them along.
If your kids make mistakes, that’s ok; it is all part of the learning process. It’s better to let them make their mistakes now rather than when they have to make grown-up decisions. You can be sure that they will thank you for what you have taught them when they are older.
