We all know now that it’s important to budget your finances to plan for the future and manage expenses, but some of us don’t learn that lesson until later in life. We also all want the best for our children, so wouldn’t it be a great idea to teach them this while they’re young? Too many parents don’t discuss finances and how to handle money with their kids, and they send them off into the world unprepared and a bit naive when it comes to saving and managing their money. Start (and maintain) a conversation with your kids to help them understand how important it is to be money-savvy.
Be a role model. We lead by example, not “Do as I say, not as I do.” Show your kids how you take control of your money to plan for future financial stability. We can’t expect them to practice good habits if we can’t hold ourselves to those same standards.
Encourage them to make smart decisions. Keep an open line of communication between yourself and your kids about money – make yourself available and open to discuss what kind of financial decisions your kids might be making (What are you buying at the mall? How much are you spending on fast food? How much money have you saved this summer?). As a parent, you have a responsibility to your child to help them make beneficial decisions to prepare them for financial success. As they get older, talk to them about what they’re doing with their money and encourage discussion about the subject often. Try to offer helpful suggestions while still allowing them to have a bit more control to encourage independence.
Stress the importance of saving. This could be the most important of all. When I was younger and I got my first job, I treated my income in a pretty disposable way – I went out on weekends, bought whatever I wanted, and saved nothing. When I went off to college and had to pay part of my tuition out-of-pocket, I completely wiped out what little I did have saved (which was mostly contributions from my parents). I was broke and utterly overwhelmed. No one had ever told me to keep something stashed away in case of emergencies, so I basically lived paycheck to paycheck and hoped for the best. If I would have known about how vital it would be as a young adult new to the world of bills and responsibilities, I would have put way more effort into saving more and spending less. The sooner you talk to your kids about this, the better – you’ll better prepare them for the road that lies ahead.
Should I give my kids an allowance? Some parents believe kids shouldn’t receive an allowance for completing chores since many of those things are part of living in a household, but it could be a great opportunity to show them that hard work pays off. It can also be an introduction to money management before they go out into the working world and start earning an actual salary. You can make a decision based on your own beliefs, taking into account how old your children are and what you’d be asking of them. Even a minimal denomination could teach them valuable lessons about spending and saving wisely.
How do you help your children become financially successful? Share your tips with us!
