As soon as your kids can count, they’re ready to learn about money and spending limits. Why start so early? Children understand basic money concepts by age 3 and money habits are set by age 7. It’s important to teach your kids these important money lessons, and you can start today.
1. Making Money Takes Hard Work
Money doesn’t grow on trees, unfortunately. In reality, you and your children have to work hard to earn money.
That’s why it’s a good idea to give your children age-appropriate chores. Assign a dollar amount to each chore, and pay your kids daily or weekly. As your kids work, they learn how to be responsible and discover the correlation between effort and financial results.
Once your children are old enough, encourage them to get a job. Your kids may work for a traditional employer or start a gig walking pets, babysitting youngsters or mowing lawns.
2. Spending Money Requires Thought
As an adult, you make thoughtful financial decisions every time you brew coffee at home, review job perks, or compare brand name and generic grocery items. Your kids need to learn the same thoughtfulness.
Thoughtful spending starts when you challenge your kids to save 50%, give away 10% and spend 20%. Customize these amounts as needed to help your kids establish a solid financial footing.
Try it This Way
Give your children autonomy over how they spend their money. You can talk together about purchases and teach your kids how to make decisions about what to buy, but ultimately, they have the final say.
You may also teach your kids to think like a boss. Show them how you create a budget, manage income and prioritize bills. Take your kids shopping, too, so they can learn how to plan their purchases, evaluate products, respect spending limits, and think through their options.
To reinforce thoughtfulness, refuse to offer a bail-out when your kids overspend or don’t have enough money to buy something they really want. Let your kids experience the pain of a financial shortage as you help them learn smart money management skills.
3. Saving Money is Worth the Wait
Most kids – and adults, too – are impatient. Who wants to save money for a big purchase when it’s so tempting to buy little stuff today? But saving is worth the wait, and you can prove this concept to your kids as you maximize your savings and utilize effective teaching tools. It’s one of the money lessons we have to remind ourselves of every now and then.
Try using a clear piggy bank to show your kids how fast their money accumulates when they save.
Teach your kids about compound interest, too. Pay your children extra when they choose to save rather than spend or open an interest-bearing savings account together.
You can also ask your kids to choose a toy or other item they want and plan to save up for that item. Create a chart, graph or visual aid that marks the savings progress. With this prompt, your children learn to delay gratification.
Through these three money lessons, you give your children a solid foundation in money management, and you rediscover important financial tools, too.
About the Author: Jennifer Turner writes web content for a variety of clients. As a gig worker, she understands the benefits and challenges of the industry, which is why she prioritizes daily self-care. Find her at WriterAccess.