It’s never to soon to talk to your children about finances. Simple lessons now can help them learn to save money and become money smart adults. Children learn by example. Make sure the money messages you’re sending are the ones you want to send.
How To Teach Our Kids To Be Money Smart
Opportunity is Always Knocking
Don’t miss the chance to discuss potential money-smart ideas.
If your children want to get a specific items or a toy, engage them in meaningful conversation. Ask how much the toy would cost and how they plan to pay for it.
Take a Look at Your Own Example
Do you spend more on your vehicle than you should?
Have your children ever seen you pay with cash? (This can help them grasp the concept of money more easily than always seeing you pay with a credit card).
Is money and your financial situation something that is openly discussed in your family?
A Penny Saved
First grade or even earlier isn’t too early to begin learning the value of saving. Set an appropriate allowance based on the child’s maturity and ability. The good old-fashioned piggy bank is a great way to start.
There are also more high-tech options in banks today that keep track of the money as change is put in and helps little ones see how quickly change can add up.
Discuss goals for rewards that allow redeeming some of the savings at certain milestones.
Here are More Tips
Wants vs. Needs
Really listen to what your child is saying about money. There are many times when a money lesson can be taught in a positive way when we understand as parents what our children are trying to convey.
There is also a wonderful opportunity, through dialogue, to explain the concepts between “I want” and “I need.”
Save, Save, Save
Saving is an important part of being money smart. Help your children save on a bigger scale by transferring some of their piggy bank into a savings account.
Have your children be involved with the monthly statements and monitoring of the deposits.
Try to make a regular, scheduled deposit, no matter how small, to get them into the habit of saving regularly.
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Fool Me Once
Remember, mistakes happen and money is no exception. Try to handle money mistakes in a positive way. Present an error in judgment as an opportunity to learn from a mistake, not be punished by it.
No Means No
Accountability is important and an essential part of being money smart. Mistakes are acceptable and a great way to learn. Clear cut dialogue and expectations of spending and saving is important, especially as your children become older and want to be more in charge of their finances.
Guide children gently and make sure they are aware of the limits of their own funds and what they can ask for from you.
Practice the financial values you want to teach your child; it’s never too soon to start teaching your children the importance of money management.