As parents and caregivers, teaching our children about money is necessary. Quite often the subject is overlooked and kids are at risk of not knowing how to manage their finances as adults.
Here are 7 financial tips you should teach your children:
Money is Limited
It’s important to teach kids that money is limited, and that people have to live within a budget and not rely on credit. As the saying goes, “Money Doesn’t Grow on Trees!”
How to set up a budget is not something we’re typically taught to do in school or at home. Yet, learning how to set up a budget is an important skill to pass on to your kids. It will be of great value to them once they’re in college or in the work force. Help them to learn about paying essential bills first, and how to budget for holidays, luxuries etc.
Another good financial habit to teach your children is to prioritize. Parents often pay for so many different activities and hobbies these days, which can cost a lot. Why not give them choices instead? Do they prefer soccer or swimming? Do they want to spend their Christmas money on many little things, or buy one big expensive toy?
Saving as a Habit
Financial education for children should definitely include the importance of saving money in a savings account. Encourage them to save some of their birthday money and earnings from jobs for the future.
While young kids shouldn’t be worrying about the cost of living, it is important that they learn that everything has a price and a value. This way, they will be aware that it’s important to look after their things and spend their money wisely.
Work for wants
Kids should know the value of working for what they want. You don’t want your kids to take having money for granted and essentially wasting their lives with the sense that everything is entitled to them at no cost. This attitude can mean that they’ll keep coming to you for cash or they may go on spending frenzies with credit cards. Teach them while they’re young and they’ll be more likely to hold a sensible attitude towards money as adults.
Can’t have Everything
While it’s understandable that parents want their kids to have the best of everything, quite often it isn’t affordable. It certainly isn’t helpful to let them think that they can have whatever they want. Teaching them that they can’t have everything will help them learn what really matters in life, and think about needs rather than wants.
Financial education for children is essential – starting them off with good money habits and a sensible attitude towards finances will help ensure they’re financially smart later in life. It’s never too early or too late to start!
Do you have any financial tips for kids? Is there anything you wish your parents had taught you about money?