As a parent, we want the best for our children. That means we must teach them about money early in life. For many adults, discussions surrounding money, income and savings are considered taboo – which often is due to their own upbringing. In many households, you just didn’t discuss finances with your parents.
Times have changed, and studies have shown that children who learn about money at a young age grow up to be financially responsible adults. Following these simple tips can lay the foundation for your child’s financial success:
LEAD BY EXAMPLE:
Your children want to do whatever you do, so setting a positive example with your financial habits is a great start. If you constantly are making impulse purchases, they will think this is OK and want to do the same.
TEACH THEM ABOUT SAVING:
One of the essential habits to learn early and reinforce often is saving. The easiest way to start is with a clear savings jar or piggy bank. Allowing your little ones to watch their money grow will be exciting for them. If your children are a little older, take them to the bank and open a savings account. Allowing them to make their deposits gives them a sense of independence.
SHOW THEM THAT THINGS COST MONEY:
When you are out shopping, include them in your purchasing decisions. Explain why you chose a particular item over another and how the value influenced your decision. This concept also will help them understand budgeting.
SHARE THE VALUE OF GIVING BACK:
By instilling in your children the value of helping others and contributing to worthy causes, you allow them to understand gratitude and generosity. They also will learn to be content with what they have and less likely to fall into the comparison trap.
CREATE LEARNING OPPORTUNITIES:
Children must learn that money is earned and not given. An allowance is an easy way impart this lesson. By assigning them certain chores to complete to earn their allowance, you help your kids understand the value of money earned versus money given.
While money conversations can be intimidating, having open, honest conversations about this topic with your children is a vital part of their development. Teaching them to make smart financial decisions now sets them up for future success.