Did you know that one out of four adults in the US said they didn’t learn about finances growing up? Consider teaching your kids the importance of budgeting and saving. They will be better equipped, going off on their own after graduation.
Do you want to learn more about how to go about teaching money management to your children? Not to worry! In this guide, we’ll go over finance for kids.
Want to learn more? Keep reading.
Model Good Money Habits
Children can form money habits. Growing up, they watch you spend money at the grocery store or buy dinner out. Kids will also notice if you and your partner argue about money.
Aim to set a good example. You can explain why you buy groceries once a week and use coupons. Tell them that going out for dinner is a treat.
Your kids will observe your money management habits and may follow them when they get older.
Set up a Piggy Bank
Consider using a clear jar or container so your child can see the money inside their piggy bank.
Over time, they will see how the money adds up as they save. Explain the importance of putting money away and not touching it.
Explain the Cost of Things
Instead of stating that their new stuffed toy or car costs a couple of dollars, show them. Ask them to go to their piggy bank and withdraw the money. When you go to the store, let them hand the money over to the cashier.
If your teen wants a video game, explain how buying the game takes money away from their new shoe fund.
What About Earning Money?
Pay your children money based on the chores they do around your home. Give them money to mow the lawn, take out the trash, walk the dogs, or clean their room.
Help your children understand that money is something that gets earned.
Teach Them About Impulse Buying
Your child may have found something at the store and expressed their interest, asking you to buy it. Younger kids know how to get their impulse buy by asking their parents to buy the toy or candy.
Don’t give in and instead explain that they can use their hard-earned cash.
If it’s a more expensive item, encourage your child to wait a couple of days. Let them know it will still be there the next day.
Teaching Teenagers About Contentment
Does your teen spend time on their smartphone, scrolling through social media? When people spend a lot of time on social media, they see different things they want to buy.
Your teenager might ask about getting a newer car because their friend got a brand new vehicle. Explain to your teen that their car gets them to where they need to go.
Kids also post about their extravagant birthday parties and celebrations. You can still throw fun birthday parties that don’t cost a chunk of money from their school savings.
What About a Bank Account?
When your child is a teenager, look into setting them up with a bank account. You can help them get prepared for a more significant account when they are older.
A bank account will allow them to get used to depositing and saving money. They will be able to access online banking and see what they spend their money on the most.
Talk About College
Sit down with your teen before they apply for college and ask them how they plan to pay for their education. Let them know that student loans aren’t the only route, and they can look at alternatives.
Talk about community college, scholarships, in-state universities, or part-time jobs. This way, they will know what options are available, and won’t have to take on massive debt.
Save for Further Education
Encourage your teenager to begin saving for college or trades school. If they plan to work a summer job, help your kids understand the importance of budgeting and saving.
They will be better equipped to live on their own after graduation. If your teen contributes to their education, they’ll take ownership of their studies.
Educate Them About Credit Cards
Credit card companies start hounding 18-year-olds, especially if they head to college.
You’ll want to share about the potential pitfalls and dangers of credit cards. Explain the importance of paying it off each money.
Create a Straightforward Budget
If your child likes to use their mobile device, teach them about the importance of budgeting.
There are money apps that allow you to track your spending. Your teen can learn about how to budget their income while they still live at home.
Talk About Insurance and Emergency Funds
Chat with your teen about the importance of saving an emergency fund.
If their car breaks down or they need to buy a new computer, they can buy it right away. Your teen won’t have to use their credit card and wrack up debt.
Someday, they will want to look at life insurance. Go over the different types of insurance and available products.
For example, share that they should consider a product like Critical Illness Cover. It pays a lump sum benefit if someone is diagnosed with one of the illnesses covered under the policy.
Have Fun Teaching Money Tips to Your Kids
We hope these tips on finance for kids were helpful. Teaching money management to your kids will help them in the future when they live on their own.
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