Like any parent, you want the best for your children. More than simply providing, your job as Mom or Dad includes teaching them how to handle the responsibilities of life, and that includes managing money wisely. How can you steer them in the right direction when it comes to finances? Read on for some tried-and-true techniques you can use when teaching your sons and daughters about money.
Allow for Allowance
Allowance can be a divisive issue. Some parents like to tie their children’s allowance to chores and others prefer to set a weekly amount with conditions attached, such as a set amount going toward savings or to charity. No matter which parameters you set or how much or how often you pay up, establishing an allowance is a good idea. With control over their own funds, your children will be more likely to think twice about blowing it all on another Elsa doll or Nerf gun.
Set Goals (and Expectations)
Don’t just pass out an allowance or tuck birthday money into the piggy bank – talk to your kids about what they can (or should) be doing with their cash. Many families make savings a priority and incentivize the option to save by matching, dollar for dollar, any amount the child puts into their account rather than in the spending pile. Or, if your child has his eye on a new toy or game, sit down with him and figure out how many pennies, nickels, quarters that is – it’s a smart way to sneak in a math lesson, too!
Let Your Child Drive the Shopping Cart
It’s not a coincidence that the brightly colored treats and sugary cereals are positioned right at a kid’s eye level at the grocery store. The sooner you can clue your kids in to the actual prices of the basic necessities, the more likely it is that they’ll remain conscious of these costs. For older children, have them set a budget for the week and join you at the store. Ask them to price-match their lunchbox requests.
Be an Example
The absolute, most effective way to raise kids who are smart with money is to set a good example of responsible saving and spending. You can most easily do this by keeping the lines of communication open with your kids. When they ask what “cutting back” means, tell them both why and how you’re doing this. Or, when you’re making a big purchase, like a new car, include them in discussions about pros and cons.
Too often, parents think their children won’t understand or that they don’t need to be burdened by the information. By openly and honestly explaining the financial choices you make, you’re able to teach kids that money isn’t something to be afraid of, and instead, they should meet their finances head-on.
How do you bring finances into the family conversation at your house? Tell us in the comments below.