Why It’s Never Too Soon to Teach Your Kids Money Management
Although your kids might not always acknowledge the guidance you give them as they are growing up, they do tend to rely on you to set them on a good path in life.
One of your key parental tasks is to teach them good financial management so that they are able to make informed and savvy choices when it comes to credit and handling money in general.
Here is a look at some of the good financial habits you should try to instill in your kids, even when they are in their teens. There are insights on how your experiences can shape your own money management skills and tips on how to pass on those lessons to the next generation.
Learn to earn
It seems the vast majority of kids aged somewhere between 8 and 15 receives a weekly allowance which we label as pocket money, but it also appears that many of us don’t require our children to do anything in return for that cash.
The concept of pocket money is a great idea as it encourages kids to take an active role in handling money and learning how to save things, but another useful lesson would also be to show them that money doesn’t come that easily later in life.
There is a lot to be said for giving them some chores to do around the house in order to earn the cash you are giving them each week, as it will teach them the value of money.
It is worth remembering that children are capable of forming a definite opinion about money from a very early age but as there is not a great deal of financial education being taught in schools, it is going to be mostly up to you to teach them the importance of good money management and the need to earn the money they want.
You obviously want to talk positively about finances with your children but it doesn’t hurt to give the lowdown on some of the mistakes that you can make with money, especially if you have made some yourself and don’t want them to follow in your steps.
If you were raised in a family environment where the finances were a bit chaotic and it sometimes seemed to be feast or famine, you can either learn from that experience and then pass on what you learned from that growing up, or the worst case scenario is that it set the scene for you to behave the same way with your own financial management.
There are ways and means to talk to your kids in the right way about these problems and they don’t need to know all the details of any problems you might have had if it is not relevant to them.
You might want to learn more about options like credit card consolidation if you are struggling with your own finances for whatever reason, but the main thing to do when it comes to talking to your kids is to give them a basic grounding in the fundamentals of borrowing on credit and the potential consequences of these actions.
Building a better future
Point out the benefits of setting savings goals and working out a budget so that you know where every dollar is being spent.
If you can teach them about spending, borrowing and saving and how to find a good balance between what comes in and what goes out, it should help your child to be more financially savvy.
If you can achieve that goal there is every chance that they can enjoy a better future and a better relationship with money.
Anthony Farmer is a Dad and also works as an educator. He is passionate about raising the next generation so that they able to face real life situations with confidence and ease, having been taught all they need to know.