Tips for Teaching Your Kids About Finances
You may think that your personal finances are above your children’s head, but it is never too early to begin teaching smart money habits. You want the best for your kids and to provide them with all the tools they need to be successful as they grow up. Part of that foundation is helping them understand the value of earning, spending, saving and investing money.
Too often, parents avoid talking to their children about money for several reasons. Sometimes they don’t think it’s necessary, or they think they can wait until their children are older. Sometimes parents feel that since they are not “financial experts” they are not qualified to teach their children.
If you’re looking for ways to introduce personal finance topics in conversation with your kids, here are some ways to get started:
Since one of the biggest reasons parents avoid financial talks with their kids is a lack of knowledge – learn together! Take this as an opportunity to educate yourself so you can create a better future for your children. In fact, you can integrate your newfound knowledge into your daily routines.
Be sure to include your children on how you’re using your knowledge to make positive changes for your family. This will boost their confidence in seeing that what you’re teaching them has real-life applications.
Think About the Future
Looking ahead and planning for later, not just thinking about “now,” is a sign of maturity. When kids get birthday or holiday money, they are usually eager to go to the store and spend it all right away. Teach them the importance of thinking into the future – even if that just means a week or month ahead for them – and saving some of their money.
Ask them if there is anything fun they want to do in the weeks ahead, or if there is a more expensive item like a bike they’ve been wanting. Show them how to budget for upcoming outings and save a little at a time for a big purchase they want to make. It may be difficult at first, especially for younger children, but they will understand better once they reap the benefits of their patience and planning.
Practice What You Preach
It is so important for us to lead our children by example, and personal finances are no exception. Again, even if you’re not in a great financial position, that just means there is room for growth and improvement. Prove to your kids that it is worth having discipline with your personal finances.
While it’s important to draw the line with how much of your personal finances you share with your kids, find ways to show them how you’re improving. Choose a credit card or loan that you include them on. Show them how much you’re able to save as you pay it down faster.
With these tips, you can begin to integrate financial topics into conversations with your kids. No matter how you decide to include your kids in your personal finances, you’ll be making a positive impact on their future.