3 Ways To Teach Your Children About Finances
One of the most common things that people did not learn from their parents but wish they would have is advice about personal finances. This is the kind of thing that was never taught in schools when most people were growing up, and they were forced to enter the workforce as well as other parts of reality right after high school or college without a clue about how managing finances works.
Most people were never shown how to balance a checkbook, manage credit cards, etc. And sometimes this comes back to haunt them later on. Luckily, you can learn from your own parent’s mistakes and when you have children of your own you can show them differently so that they don’t make the same mistakes you had to! Act now, before you reach retirement age and need to move into an assisted living community.
Here are 3 easy ways to teach your kids about finances.
Lead By Example
Even from a very young age, your children will watch what you do in all aspects of life and eventually may learn to imitate these things. Leading by example is super important because your kids will see how good you are with finances and will want to learn to be the same. Plus, if they have questions for you about money you will always be able to answer them without too much issue because you are so well versed in managing your own finances.
Give Them An Allowance
Giving your children an allowance is a great way to teach them about money management. It’s up to you whether you want to make them work for it by doing chores etc. or just give them a certain amount of money each week or month. Either way, make sure that they learn to really understand the value of a dollar. For example, if there’s a certain toy that they really want but it costs $20, and they only get $5 allowance each week, explain to them that it will take them a month to save up for it, and that’s without spending on anything else. Also, make sure that they don’t get money from anywhere else so that they can learn what it feels like to save up.
Allow Access To A Credit Card
This is more for young adults and teenagers than small children, but giving your kids access to a credit card (whether adding their name to yours or getting them their own) is actually one of the best ways to teach them about finances. Learning to build credit and manage it responsibly is such a valuable life skill that so many adults wish they’d have learned when they were younger, so if you are able to instill this in your kids early on they will benefit greatly from that.
Teaching your kids about money doesn’t have to be stress-inducing or overwhelming. Start off by teaching them the things you would have loved to have learned when you were younger, and see where these tips take you.