How To Teach Your Kids Good Money Habits

| by | All Articles | 0 comments:

(Written by Cameron Huddleston)

As a parent, you want the best for your children. This doesn’t necessarily mean you want them to have the best clothes, the latest toys or coolest gadgets. Most likely, it means you want them to be safe and secure. And you want to lay a foundation that they can build upon to do well in life. The question, then, is whether you’re teaching your children a key lesson that will impact whether they will do well. That lesson is about money.

Even if you’re not teaching your kids about money, they will learn lessons about money one way or another. If you want to play a key role in shaping your children’s feelings, thinking and values about money, you need to give them the gift of financial literacy from an early age. Here’s how.

Start With the Basics at a Young Age

Once your kids are old enough to know they shouldn’t be sticking pennies in their mouths, you should introduce them to coins and cash. Explain what money is and how it is used.  Actually, showing them how money works is more effective. So let them see you making purchases with cash. Even if you pay with a debit or credit card, explain to your kids that you’re using your money to make purchases.

Instill a Habit of Saving

Your kids’ early interactions with money will likely involve spending. They see you using it to purchase things, including things for them. So, it’s important to teach them from a young age that money isn’t just for spending—they should be saving money regularly, too. Learning to save isn’t just an essential money habit. Help your kids get in the habit of saving by giving them a piggy bank or savings jar where they can deposit coins or cash. Then use short, simple messages to encourage your kids.  For example:

Saving is a great habit.

I love to save.

It feels good to save money and build my future.

With young kids, though, you’ll likely have more luck teaching them to save for short-term goals—such as a toy they really want—rather than for the future. Parents also can encourage their kids to save more by agreeing to match the amount they save dollar for dollar or by a certain percentage.

Create Opportunities to Earn Money

Kids need to have money of their own so they can learn how to make decisions about using it. An allowance can accomplish that. However, you should consider requiring your kids to do certain chores to earn their allowance.

Show Kids the Value of Giving

A key reason that it is important for you, as a parent, to teach your kids financial lessons is because you can share your money values through those lessons. If you value giving to others, you can instill that value in your children by helping make it a habit for them from an early age.

Teach Kids How Their Money Can Grow

Saving money is a great habit. But if you want your kids to learn how to truly build wealth, teach them about investing. If you don’t understand investing well, you could give your kids a book that explains how it works.

Model Good Financial Behavior

Just as important as the lessons you teach your kids about money are the ways you discuss and handle money when you’re around them. For example, if you complain about having to spend too much on certain things and then take your kids on a shopping spree, you’re sending mixed messages. Instead, make sure you model the behaviors around money that you want your children to adopt.

If you want your children to develop good spending and saving habits, they need to see you making smart spending and saving choices. In short, practice what you preach. And preach with consistency. Educating your children about personal finance is a process that can take time. But if you put in the effort and continuously communicate a clear message about money, you will instill good habits that will serve your children well.

Link to full article

https://www.forbes.com/advisor/personal-finance/how-to-teach-your-kids-good-money-habits/