Teach your children the importance of financial responsibility.
Knowing how to handle their money and the importance of fiscal responsibility can be one of the most valuable lessons we can teach our children. Especially since good, and bad financial habits can affect the rest of their lives.
Even if parents don’t have the best habits, it isn’t too late to teach your children along with changing your own behaviors as well.
How to teach your children about money:
It is never too early to teach your children about money.
- Set a good example by having good financial habits yourself.
- Open a savings account for your child and encourage them to make regular deposits.
- Explain why it is important to save money and to use it wisely.
- Limit spontaneous purchases and talk with your child about saving for important purchases.
- Teach your child that there are many choices when it comes to their money – saving, donating, spending – and which are the best ones and why.
- Help your child set short-term and long-term financial goals – saving for a new bike in the short-term and saving for college in the long-term.
- Give your child an allowance and use it to teach financial responsibility:
- Have your child set aside a certain percentage for savings.
- Help them budget what they have left.
- Stick to that amount so they understand the ramifications of running out of money.
Don’t just hand money over to your child, have them do a chore or other task in order to “earn” that money. They will start to learn the value of money and what they have to do for it.