It doesn’t matter how frugal you were before you had children; as a parent, you can teach them the lessons you wish you knew when you were younger. It’s not to say that they will always follow your advice but it’s a great place to start – and the sooner they learn the most important lessons, the more prepared they are for the real world.
Here is a handful of smart money tips any forward-thinking parent should pass on to their children so that tomorrow’s economy can be a bit better than today’s.
Money means work
While most teenagers and young adults should be well-aware of the lack of magical money trees, it’s never too early to start talking about work with your kids. Try to inspire a willingness to work in order to make money rather than just giving them an allowance every week or month.
Doing chores can, for example, be a way for them to learn this; ask your kids to help out with more than the chores you expect them to do without any form of compensation, such as cleaning their rooms, and offer them a reasonable amount of money for it.
Tidying up in the garden is always a good idea as your kids get to be a bit active outside of the house as well. Moneycrashers.com has a great article on this in case you need some more ideas on chores.
You should also consider teaching them some entrepreneurial skills by encouraging them to set up a classic lemonade stand this summer, helping out some of your neighbors or even selling the toys they’re no longer interested in on eBay.
Talk about saving and investing
Most children would like to spend all the money they get at once but try to talk to them about how they can save the money they get instead.
Use the opportunity to talk about how they might be able to save for a larger purchase than just the latest game or biggest candy bar; by the time they’re young adults, they might be money savvy enough to avoid the debt trap.
In case they are already teenagers, you should sit down with them and have a look at consolidatestudent.loan and advise them on how to avoid paying down on their loans for the next couple of decades. It’s the kind of stuff everyone should know about.
While the concept of investing money may seem a bit hard to grasp if your child is still very young, there are some great stories out there you can read to them that dips into the concept. The Little Red Hen is, for example, a great story to read in order to understand the basics as the little hen is able to reap the rewards of her investments.
Another way to make your kids a bit more aware of the value of money is to help them keep track of everything they spend. Draw a line between the amount of money and how long they would have to work for something they want; is the purchase worth the work they’d have to put in?
That way, you’ll be able to raise children who understand where money comes from and what it means to save, invest, and stick to a budget. It’s the kind of people the world needs more of.