This year has really taught us all a lesson in understanding our own financial habits. What’s the best way to have good habits? Making sure kids learn them early in life!
If you haven’t started laying the foundation for healthy money habits with your children yet, now’s the perfect time to start. Here are a few fun, stress-free ways to get every family member involved with finances.
Way #1: Don’t Be Afraid to Experiment
Making mistakes is one of the most effective ways a child can learn to do something. If you’re going to make financial mistakes, it should be when the stakes are incredibly low before adulthood. Parents have the power to create a safe environment for kids to experiment, make mistakes and gain hands-on experience with money without any real-world consequences.
A small allowance each week can give kids the limited freedom necessary to experiment with money and learn valuable lessons like spending money versus saving money. Encourage them to create a budget and make goals. Soon enough they’ll learn the value in saving their allowance for a big purchase later instead of spending it impulsively as soon as they get it.
Stay involved with how your kids are spending or saving. Help them talk through their frustrations, answer their questions and provide guidance when needed.
Way #2: Have Open Discussions About the Family Budget
Money tends to be a very taboo subject, even with family members. By having an open discussion about your family’s budget, it can break that stigma surrounding money and help your kids see how a real-life budget operates.
This can be an eye-opening experience for your children. When your child wants to go out to eat every night, remind them about your budget for entertainment and dining. Every time you’re spending money, your child is seeing a budget on paper come to life. (PS. This may also help YOU stick to your own budget)
Remember, this shouldn’t be stressful on your child. If you don’t feel comfortable sharing your whole household budget, start with just a few easy categories like entertainment, dining out and groceries. You can even make it a challenge to have your kids find creative ways to do things within the family budget.
Way #3: A Little Fun Competition Never Hurt Anybody
If your household already has some sibling rivalry, why not play into it with a friendly competition?
Turn budgeting and saving money into a game. Give your shopping list to each sibling and let them search online or in the newspaper for coupons and sales. Offer a reward for whoever finds the most savings, or put whatever money is saved from the coupons into their bank account.
In almost any scenario, incentives matter. If your kids have fun incentives to work towards, it will keep them motivated and plugged in to what they’re learning. Who said learning about finance had to be boring?
Way #4: Stress the Importance of Hard-Earned Money
Knowing how to save, invest and spend money is important. But to make the lesson really hit home, consider having your kids earn a little money of their own.
If your kids don’t work for the money they are given, it will make spending it on less important stuff that much easier. If they are spending hard earned money, it will drive home the point of waiting for something REALLY important to them even more. If they’re old enough to work, consider encouraging them to find a part-time summer job or seasonal gig. If they’re younger, find chores for them to do around your house or for other family members, and pay them per task. The willingness to work hard and be rewarded is one of the best financial lessons you can pass on to your young ones.
There really is no wrong time to start discussing money with your kids. If your kids are older, it’s not too late. If your kids are younger, there are ways to teach even the youngest kids about basic concepts. And like we said, it doesn’t have to be boring. Get creative with it! If you need help thinking of more ways to get the discussion started with your kids, get in touch with us! We would be happy to help. You can click here to schedule an initial call with one of our team members. There is no cost or obligation.
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