As a parent, you only desire the best for your kids. This has nothing to do with having the latest gadgets or having up-market clothes. Most likely, it has to do with helping them stay safe and secure. You can do this by laying a strong foundation to help them build themselves and do well in life.
You might ask yourself if you are doing enough for your children to teach them key life lessons that will greatly impact their lives. One of these critical life lessons is about money. Without basic money skills, it is unlikely that someone will do well in life. Money is fundamental for transacting life. Everything revolves around money everywhere, from what we eat to what we wear to the car we drive to healthcare to insurance to entertainment: you name it, everything involves money.
Plenty of parents are not teaching their kids to become financially literate. On the other hand, children are waiting for their parents to give them basic money skills. Learn to teach your kids financial literacy at an early age so that they do not learn along the way through mistakes. This is the best gift that you as a parent can give your children. Here is how you can teach your kids smart money habits:
Start With The Basics At A Young Age
The earlier you start the financial education process for your kids, the better. It will help if you start these lessons even before your kids attain the age of seven. At this age, they have already begun to develop money attitudes and habits.
Once your kids start recognizing that they need money to buy their favorite toy, this is the perfect time to teach them the value of money. Explain where people get money from and how they use it. It can be quite effective if you can be more pragmatic by letting them see you as you make purchases using money.
Instill A Habit Of Saving
Your children’s early encounters with money will primarily involve spending. They are likely to see you making purchases and some involving their candies and toys. You should teach them that money is not just for spending and that they should save too. Saving is not just a basic money habit; it teaches delayed gratification and discipline. In addition, it teaches your children to set goals and plan for the feature, hence building independence and security.
Create Opportunities To Earn Money
Kids should have their own money to learn how to make better decisions. You can consider giving your kids some simple home chores to earn their allowances. This way, they will learn that money comes from working. When you pay your kids to do certain chores, they are likely to complete tasks within a good time. Also, you can encourage them to take on more tasks for more allowances. This exercise will instill discipline and hard work.
Good Things Happen To Those With Patience
Teach your kids that delayed gratification combats the buy now, pay later mentality that could get them in credit card debt later. Learn how you can reinforce the idea that patience pays off. You can help your children save through the banking system. Find a financial institution that offers a bank account and debit card for children to help your young ones spend better.
Tell Them The Truth
You should let your children know why you go to work every morning and return home late. Explain to them why you cannot spend the whole day at home playing with them. Also, let them know why you constantly talk, as well as your family’s financial status. Telling them the truth will lessen their anxiety and understand how much money is part and parcel of living.
Explain To Them How Much Things Cost
Some parents are always surprised to learn that their children do not grasp what some basic commodities cost. You can give them a tour around the house and let them know the cost of some basic items. Let them know that you pay bills to keep water and electricity supplied. This exercise will teach them the importance of conservation in money-saving.
Realize That Kids Learn What They Live
Parents are the most influential people in children’s lives. When you live by spending and having nothing to save, your children may perceive that as normal. You can not realistically expect your children to do what you say if they realize it is not what you do. They are going to do what you practice.
Kids are often bombarded with information about the cost of different commodities, whether fancy cars or high-end fashions. What they are not informed about is how they should manage money effectively. Let them know that a fancy way of life is not the only way for a happy life. With the little they have, they can save some for a better future.
Get to know where your kids’ money is going. This is a great step towards your kids achieving excellent money management skills. Teach them recordkeeping to keep track of earnings, spendings, and savings. You can help them do it on their computers or a notebook by creating a file to keep all the recordings, statements, and receipts.
Offer Savings Incentives
If you find it hard to teach your kids how to save, you can reward them with a certain percentage of money, depending on how much they have saved. This will encourage them to keep more as they know there is a reward for it. You can also set a milestone; you can give a bonus when they hit the halfway mark, and once they complete the milestone, you can reward them fully.
The tips outlined above are an excellent place to start towards financial independence and literacy for your young ones. Your kids can not learn all the habits overnight. It is a gradual process that slowly becomes part of their lives. Be a good teacher by setting a good example of smart money habits.