School educators do their best to teach your kids about subjects like biology, geography, and geometry but private financial lessons aren’t their job to teach. Many schools provide programs that teach young students about the theory of money, but don’t give knowledge about financial responsibility.
Perhaps you’d like to see your child more successful in business than their rivals when they get older, be prepared to correctly manage money, or even become an entrepreneur.
It’s a good idea to give your kids financial lessons about how to wisely save, spend, and earn money. By teaching your kids these simple rules, you may also learn yourself. Here are five ways to teach your children and improve your own financial responsibility.
1. Motivate Them To Earn Money Independently
When gifting your children expensive things like smartphones or video games, they have no motivation to earn and save up for these things themselves.
Instead of indulging them and setting them up for potential credit issues, make sure your children understand that instant satisfaction leads to bad money habits.
In the process of saving up money for their whims, children learn to receive satisfaction in “earning” the item. While saving, children also have time to think if they actually want the item or not.
2. Involve Your Kids In Your Business
If you are a business owner, you have a unique ability to teach your kids the money culture. Start with simple things and increase their duties as they gain experience.
Your kids can start assisting you in small tasks and then move on to managing social media accounts or services your company offers. As they get more involved in your business operations, start sharing with them your personal knowledge of cash flow management, taxes, and strategic planning.
Discuss financial situations to illustrate the models you want them to learn.
3. Don’t Give Allowance Unless It’s Earned
If you give your children money for anything they desire without earning it first, be ready for this habit of spending money to spiral into potential failure.
Even a part-time or summer job will help them understand what efforts need to be done to get a paycheck. Prepare children for the real world by assigning duties and tying hard work to financial rewards. Build a plan for short-term tasks or part-time jobs that can help your kids earn some money.
4. Open A Bank Account Together
Among the best ways to teach kids money management is to give them a place to save money besides their piggy bank. You can go to the bank together and open a savings account or give them their own debit card. This will help them learn financial concepts like interest rates.
Stimulate them to make a goal of adding a certain dollar amount to their accounts. You can review the monthly statements together and observe how the balance is growing. They will be surprised by how much can be saved in a short time.
5. Be A Financial Example
Your children will take after almost everything you do, so your financial decisions influence their monetary responsibility. You are their model for how to handle their own money.
Laying the foundation of money culture in your child is easier if you have good money habits too. Discuss the pitfalls of having a credit card or nuances of student loans and their impact on work and life.
When you’re at the grocery store, talk about your food budget, illustrate the value of a dollar in person at the movie theater or when shopping for school clothes.
This way they see how money gets spent. You probably want to give your kids all you can but instead of material things, gift them financial education. This will ensure their monetary stability during their adult life.