HNE Staff Teaching kids financial responsibility as early as possible is vital. It might not be easy, but the earlier you start talking about money management, the better it would be for them. It does not have to begin on grand concepts. Let them familiarize themselves with the idea of money and handling it responsibly.
Teaching kids financial responsibility will grow up to be adults who will know how to manage their money, income, bills, and expenses instead of getting stressed about these things. However, you should teach them financial literacy while they’re still young.
Parenting is not easy and it’s likely going to make mistakes. Avoid these parenting mistakes to give you an advantage in raising more responsible adults.
Here are a few pointers parents can use to mold financial responsibility in their kids:
1. Talk About Money
Don’t repress yourself from talking about money in front of the kids, but don’t show them how stressed you are about it. Instead, show them how much you have saved for a planned family vacation. Express your excitement about finding bargain goods. Always use terms to help them in their journey to financial responsibility, such as save, choose, and share.
2. Take Them Shopping With You
It’s not enough to talk to your kids about money in abstract terms. Let them see the buying process, from identifying the item’s price, determining their value to you, and deciding whether to purchase it or not. For starters, you can let them handle a few dollars to buy something and get the change. Have them talk to the cashier about how much they should pay and let them handle the money. This interaction might help them better understand the cost of things and their responsibility when they choose to buy those things.
3. Play Interactive Money Games
Help your kids pay more attention to money. Let them play money or math games or watch educational shows about it. Even something as simple as teaching them how to use a calculator to find the price of the toys they want in a store is a good start. It will make them understand how much they should put in their bank account to afford the toys they like.
4. Teach Them to Save
Teach kids how much fun saving money can be, starting with opening a bank account for them. Introduce it as a little game by letting them put money in a piggy bank, then take the accumulated cash and deposit it in their savings account. Don’t forget to deposit money in your own bank account, too. As parents, you should lead by example.
5. Help Them Find Ways to Earn Money
If you have elementary or middle schoolers, encourage them to earn money. Help them start a business based on their talent and skills, such as painting, pet walking, making crafts, mowing lawns, and more. Tell them to research how much they can make from their product or service and help them with the computation. Show them how much profit they can earn from their business.
Being resourceful in finding sources of income will come in handy as your kids prepare themselves for college. If your family can’t afford it, help them save for college, look for college grants, work-study programs, scholarships, or loans, and figure out the monthly payments.
6. Show Them Your Positive Attitude Towards Work
Put your kids on the right path in keeping a positive attitude towards work. Minimize griping about your job. Instead, discuss with them how excited you are to go to the office to make money. Don’t make them feel like they have to be annoyed when they go to work or complain about something in your workplace because it is all they see from you.
7. Discuss Spending Habits with Them
Ask your kids what they want to buy with their savings. Talk to them about what might happen if they buy candies, toys, or video games without the usual criticism. Open their eyes up to potential good options and use positive reinforcement if they make a good choice. Teach them the idea of wants and needs. If they insist on buying a toy even if you don’t intend to purchase it, remind them that you will take it out of their savings. Then, ask them to rethink their decision before making a final one.
8. Show Them the Value of Charity
While it’s good to teach kids to save for their own needs and wants, show them how great it is to give. Let them see how you gave a check to donate to the local zoo, school supplies for the kids at a local school, and such. Help them pick a charity or organization where they want to donate their money regularly.
9. Help Them Track their Money
As they grow older into their teenage or college years, educate them on the importance of tracking their money. They can use various apps to monitor their spending, budget, investments, and savings. Ask them to record every dollar they spent so you can go over it together and evaluate their spending. It is not a good idea to give them access to credit cards until they get a stable income to pay their credit card bill on time.
10. Encourage Them to Invest
It’s never too early to start educating your kids about investing. Talk to them about the stock market, starting with defining stocks. Show them a list of companies whose products or services they love or are interested in. It could be Coca-Cola, PepsiCo, Starbucks, Target, Pfizer, Chipotle Mexican Grill, Apple, Amazon.com, Mattel, Walmart, Walt Disney, and more.
Play a game of pretend investing with your kids using the companies they like. You can create a portfolio on sites like Yahoo! Finance and imagine buying a few stocks at the same price they’re selling now. Then, monitor the changes in the portfolio every week. This investing game might help show your kids how the stock market works, the possibility of losing some money, and the importance of patience.
Furthermore, here are the reasons why it is important to invest early.
Conclusion
Educating your kids takes time and effort. The earlier teaching kids financial responsibility, the sooner they will form good money habits. It will help them grow to become financially responsible adults.
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