Topics about money and how to manage it can somewhat be tricky to discuss, heck, even as adults, we sometimes second guess our own financial decisions. Teaching kids about good money management is crucial for their future. And because I want to raise a financially responsible kid, and thinking you do too, I’m sharing a few tips on how to teach kids about sound money management.
Teaching Kids About Good Money Management
Kids hear about money from different sources all the time – from their friends, at school, or the shows they’re watching. That said, there’s no point in putting off the discussions in your household. If anything, it’s best that they learn about it from you first.
I’m sure you know that people tend to carry the things they learn in life well into adulthood? This is one of the reasons why you should start forming good money management habits in your children as soon as you can. By developing this habit while they’re young, you have a higher chance of raising children who are wise with money.
Give them an allowance and let them manage it
Good money management habits are developed through practice. We always say that “experience is the best teacher,” and that’s so true. You can talk to your kids about being smart in their financial decisions, but you won’t get your point across effectively unless you let them do it themselves.
You can start by giving your kids an allowance to spend and budget. Be careful not to provide them with too much, as that will only defeat the purpose of this exercise. Another important thing is to let them handle the money their way. If they want to blow a week’s allowance in one go, let them. But don’t give in when they ask for more. This way, they will remember the consequences of overspending and become more careful about their decisions next time.
Instill in them the value of saving and investing
We know that there’s more to money management than wise spending. Saving and making money grow is just as important. What makes this even better are the exciting modern ways to encourage saving and investing in kids.
If you want to stick to more traditional ways, then you can use the good-ole piggy-bank. But don’t you think savings account for children is a way better idea? We actually do both. Depending on their age, open an account for them and let them have their own debit card for kids. Being able to track how their money grows will encourage them to save more. Plus, it’s an excellent way to prepare them for life.
When you think they’re ready, talk to your kids about the basics of investing in ways their young minds can grasp. You can use and download investing tools and applications for children online to make this journey enjoyable and interactive!
Last thoughts – kids tend to follow what adults do, so make sure you’re doing your part in good money management as best as you can. The thing is, the fact that our financial literacy is nowhere near perfect should not stop us from teaching our kids how to handle money properly. And lucky for us, we have the Internet to provide tools that make lessons on saving and investing money for kids more fun.
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