A big part of teaching your kids to be financially responsible is to practice what you preach. Kids learn by the example that you set. If you are not committed to spending responsibly and using good saving and money habits yourself, your children are unlikely to learn this skill. Here are some ways to help your kids learn the value of money in real-life ways.
Set an Allowance Amount
Agree upon a weekly allowance amount that is linked to your kids completing certain chores around the house. Instill in them that earning money involves having to work for it. Let them know that if their chores aren’t done, they won’t earn their allowance. Stick firm to this agreement. Don’t just give them the money anyway. All this teaches them is that money has no value, and no matter what they do, it will just be handed to them. Be firm in your amounts as well. Stick to what you agreed, and don’t stray for any reason. You can use apps like Homey where an amount is added through working on chores or completing goals. This is a more interactive way to manage both your household and chores done, but also children’s money and savings.
Encourage Saving a Portion
Take your kids to your local bank and open a savings account when you feel they’re ready. Strongly encourage that they set aside some of their allowance each week, and put it into this account. There are even money savings apps available for kids so that they can see how much money they’ve saved. Let them know that when they want to buy big items they can use their savings account. For teenagers, encourage them to save for big items such as a car and if they have a job, open a personal checking account to teach the difference between the two.
Be Open When Paying Bills
For older children and especially teenagers, talk to them about your household bills. Show them your bills and talk them through the process you use to pay them. This is a good visual lesson in how money works. You might want to start off with something that is more relatable to your kids. The cell phone bill might be a good jumping off point. Explain how a budget is important to making sure that all the bills are paid on time.
Communicate About Your Finances
Many parents make the mistake of not being honest with their kids about money. This doesn’t mean you need to burden them with any financial hardships you may be suffering. Talking about money and how to manage it shouldn’t be a state secret. Kids need to learn why it is important to manage your finances responsibly. Families that have open communication about all topics are less likely to have other issues.
Teaching your kids to manage their finances is an important life lesson. It will allow them to be financially savvy adults and keeps their future’s bright.
Tags: allowance, children, Children Activities, kids, money