The reason that so many adults can’t keep track of money is that they never learned to take care of money during their formative years. Don’t make this mistake with your kids. Start teaching them how to deal with money while they’re still young. If you’re not sure where to start, then take a look at these four tips.
Set a Good Example
Your kids learn about money from you, whether you know it or not. How you spend money, how you talk about money and how you react to difficult financial situations all teach your kids something about the topic. That being the case, make sure that you deal with your money with integrity. Avoid using credit cards to pay for everything. Talk about budgeting with them. Explain why you must save up money to get the items you want. Their financial literacy starts with you.
You could even try a family saving plan where everyone contributes any cash they find to a big jar that you can put toward a fun vacation or other incentive. This can make the idea of saving seem exciting instead of like a chore.
Set Up a Savings System for Them
Financial guru Dave Ramsey tells people not to get their kids a piggy bank. Instead, he suggests that parents give their kids a glass jar to put their money in. Seeing the money grow in the jar encourages them to continue saving their money. Having to take money out of their jar to buy things they want shows them that things cost money and that you have a finite amount
Once kids get older, the glass jar can be converted to a different savings system, like an investment account for kids. The important thing is to teach them to save and to teach it to them early on in life.
Encourage Them to Earn Their Own Money
Working is a fact of life. Learning how to work and earn money isn’t something that your kids should learn once they get to adulthood. Ideally, it’s something they’ll learn throughout their lives. When they’re young, offer to give them money for doing extra chores around the house. When they’re older, encourage them to mow lawns around the neighborhood or to babysit for some extra cash. When they’re older still, encourage them to find an after-school job or to start a little business of their own. Each of these steps teaches them valuable things they’ll need to know about functioning in the world of work when they get older.
Teach Them How to Budget
It’s not enough just to earn money. A person needs to learn how to take care of it to be a fully functioning adult. As it is with learning how to earn their own money, learning how to budget shouldn’t be something left for adulthood. Teach them first about how you keep your own budget to give them a real-time glimpse into adult budgeting. When the time comes, teach them how to set up their own budgets to keep track of the money they’ve earned from their various work endeavors.
Learning how to take care of money should be a lifelong habit. If you have kids, then you’ll want to teach them to start caring for their money early on in life. It’s okay to start with lessons about money even when they’re under six. The important thing is to be consistent and to teach them money lessons that are appropriate for their age. If you do this throughout their lives, then your kids should have solid money skills by the time they reach adulthood.