Depending on how old your children are, you might not think much about the importance of teaching them money management. But the reality is, you’re already teaching them, even if you don’t realize it.
Kids are perceptive. You probably already know that as a parent. But most parents don’t recognize that their children are watching the way they manage money too.
Thus, the first way to teach your children how to manage money is to set a good example. Take a look at your own spending habits.
Beyond that, what else can you do to teach your children more about money management?
Let’s look at five important lessons.
1. Teach the Three S’s: Saving, Spending, and Sharing
Even when your kids are young, you can teach them about their different options with money. One way to do this is by giving them a small allowance for household chores.
For example, let’s say your child gets five dollars a week for basic chores. You can teach them about saving, spending, and sharing by giving them three envelopes. Have them put different amounts in each envelope so they can learn how important it is to save up for big things. But also, how good it can feel to share money with charitable causes or other people.
2. Show Them How to Look for a Bargain
Showing your children how to save money is just as important as showing them how to spend it. A great place to start is at your local grocery store.
Take your child shopping with you and let them browse the aisles as you pick out your items. If you see two similar items on the shelf and one is on sale, point that out to your child. Talk about the importance of saving a few cents here and there and how that can quickly add up.
3. Don’t Be the Bank
Giving your child an allowance each week is a personal decision. But don’t let yourself become an endless source of money for them, especially as they get older. If they ask for an increase in their allowance or simply want more money to spend, it’s okay to be firm by saying no.
It’s a little bit of tough love, but not giving in will show your child how the real world works. Part of money management is learning how not to spend beyond your means.
4. Encourage Older Children to Make Money on Their Own
Once your child is a little older or even a teenager, they can start to find ways of making money on their own. Pet-sitting or babysitting are great options for tweens. Teenagers can often get jobs at grocery stores, as caddies on golf courses, or working at a restaurant.
Encouraging your child to find a job will force them to learn the importance of having their own money. And it could even make them more conscious about how they spend and save it.
5. Try to Use Everyday Examples
Again, you are your child’s first example when it comes to their view on money management. Once they’re old enough to understand how spending and saving works, try to integrate a money example or conversation into everyday life.
You can even include your child in your own financial planning. For example, share with them the things you’re saving for and explain that it’s one of the reasons why you can’t spend your money on other things. If you have a big family vacation coming up, show them how you’re putting money away for that, instead of spending it elsewhere.
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Teaching your children about money management doesn’t have to be overly complicated. Lead by example, don’t be afraid to use realistic situations, and make sure they know the importance of saving.
If you want more information on how to talk to your kids about money, feel free to contact me.
