Five Helpful Tips to Teach Your Children About Money
If you give your child the tools, saving will become a way of life
Opening a savings account for your children or grandchildren is the perfect introduction to a bright financial future. Not only will they begin to accumulate savings, but they'll learn lessons in managing their money as well. Parenting website PiedmontParent.com states, "Kids love money and are all ears to find out more about it. But surveys show fewer than one in five parents [is] confident enough to have the 'money talk' with their kids."
- Money meetings matter. Kids are inquisitive and curious, which you can use to your advantage to have financial family meetings once or twice a month. At each meeting, ask your children what they would be interested in discussing or what money questions they might have. Then help answer their questions. Have some basic resources at your fingertips - perhaps a financial book such as Money Sense for Kids by Hollis Page Harman and a computer to do some quick research. These meetings can go a long way to empower your children financially and give them confidence.
- Budgets and goals. "Waiting for someday" is never a good plan when it comes to budgeting. For some, it's always easier to spend hard-earned cash than it is to save it. Therefore, teaching your children how to create a budget can help them understand the importance of financial goals.
- Setting up a simple budget can be both rewarding and fun for youngsters. MyBudgetPlanner.com offers inexpensive and colorful budget planners for kids and teens. Have your youngster set goals, such as saving a portion of his or her allowance to purchase a musical instrument and keeping the rest in a savings account.
- Purchase costs and spending. NannyJobs.org states, "If you don't buy something you have no idea how much it costs." When you take the kids clothes shopping, give them a budget. Spend time with your children browsing for clothes and looking at the price tags. Discuss with them that they have $250 for clothes and shoes; if they spend $100 on fashionable shoes, they won't have much left for clothes. Learning this concept firsthand can be a great wake-up call for your youngsters.
- Time is an asset. Your children have time on their side. If they start saving now, it can translate to wealth by the time they retire. Help them understand the importance of compound interest and saving money daily, weekly or monthly. The road to a solid financial future is by saving consistently throughout one's life.
- Foster career passion. Do your children have special talents or interests? Guiding and nurturing your children's gifts at an early age can help them become adults who are passionate about their careers. Help your youngsters explore various interests and plan a career path incorporating their natural talents. Doing so will teach them that saving for their future can be a joy rather than a burden.
Begin teaching your kids about money when they are very young so that the concept of savings becomes second nature. If you have older children, it's not too late to help them too. Talk to your financial institution about the best savings plan for your children.