Do your children know the value of money? According to a study, most American teenagers have much to learn about managing their finances. Moreover, the research indicates that a quarter of teens surveyed do not know the difference between debit and credit. Learning about money and proper management should start at home, and parents should take the time to teach their little ones the basics of personal finances. Having good financial sense can benefit kids as they grow and helps them to be more responsible and successful individuals in the future. Here are the first money lessons to teach your kids today.
A bit of saving can go a long way
Most children know the concept of buying, but only a few know the importance of saving for a rainy day. Children who learn to save money at a young age will be better at continuing the practice once they grow compared to kids who weren’t taught to save at all. Moreover, they learn that the money they save may be put to good use once they grow, such as paying off student loans or making their first car purchase. To get your kids excited about saving money, make it a rewarding and satisfying experience for them.
Instead of giving kids a regular piggy bank, give them a clear container like a plastic money box with a lock so they can see how much they’re saving. Encourage them to put any money gifts or extra change in the box and once it’s full, take the kids to the bank and open a savings account in their name. You can even make a tradition of it by going to the bank to deposit money on the same date every year (perhaps on the day before their birthday) so children can look forward to making their savings grow each year.
Waiting before making a purchase
Just as kids can become addicted to drugs, alcohol, or technology, they can also become addicted to spending. Teaching your children to really think about making a purchase before digging into their savings can prevent impulse purchases and buyer’s regret, which are some of the things that most adults are dealing with nowadays. Kids are usually tempted to spend when they’re bombarded by commercials urging them to buy the latest gadget or toy, so it may be best to monitor the shows that they’re watching. Also, encourage your children to wait it out for a few weeks before buying something. If they still want the gadget or toy after the waiting period, then that may be the perfect time to make the purchase.
Money needs to be earned
Some kids think that money just magically appears in their parents’ wallets. Young children need to be taught that money needs to be earned. To help them understand this concept, you can encourage them to open a lemonade stand in the summer or have a garage sale. You can also use money to reward them to do extra tasks, but don’t pay your kids money every time they do their usual chores.
Teaching children the basics of finances will help them become responsible with money in many ways. Let your kids learn all these money lessons and help them grow to become financially savvy adults in the future.
Contributed by Jennifer Dawson