While you might (and hopefully do) know how to manage your finances, your kids are a whole different story. Whether they’re six or sixteen, it’s never too early to teach kids about money, although there’s a risk that it could be too late. If you want your children to be financially responsible and be better with every penny they earn, consider these tips.
Help Them Earn Their Money
Pocket money is something kids expect when they get to a certain age, but you don’t want to just give them the money. While a couple of dollars here and there is okay for them to hang out with friends, you can also make earning money around the house the norm. They can wash the dishes, tidy their room, vacuum the house, or walk the dog. As long as they’re doing something, they’re earning money.
Teach Them the Value of Delayed Gratification
The minute kids get money, they end up spending it on candy or (if they get a lot of money) maybe a new game of clothes. While it’s their money to spend, this can also create bad habits that can be difficult to break. You need to teach them the power of saving and the value of delayed gratification. Most of the time, they don’t need it now, and it will feel much better when they have saved up enough to afford something and still have money left over.
Encourage Them to Take Their Earnings Seriously
Similarly, you can teach them to take their earnings seriously as this helps them develop an excellent attitude for when they finally start work. If they spend all their earrings in a single day, that’s on them. If they want to make the money back, they’ll need to do something to earn it. This should keep them from spending frivolously, as they’ll realize you’re not there to bail them out.
Give Them The Tools To Establish A Budget
Budgeting is a powerful skill for anyone no matter how old they are. If you can teach your kids to budget their money as early as possible, they will have no trouble treating their finances with respect. You can explain common expenses, such as phone bills, care payments, and even pledge now pay later charitable giving. As these are all things they will need to pay for when they’re older, they are better off familiarizing themselves with them now.
Open a Bank Account For Them
Piggy banks are cute, but they aren’t effective. Kids should see how much money they have at any time, so finding the best savings account for kids can make this possible. A bank you can trust and access easily is the best option, and an example of this is Evolve Bank. However, the increase in contactless payments means they may pay for anything, quickly depleting their budget. Because of this, it may be better for them to designate an amount per day and withdraw that in cash.
Teaching your kids to be smarter with money won’t just save you a lot over the years but it will also prepare them for all the things they need to do as they grow up. If they recognize the true value of earning money and saving it – as well as donations and other activities – you can trust that they will have no trouble taking care of their finances.