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5 Financial Rules for Teaching Kids about Money

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As a parent, there are many things we try to teach our kids. Being financially responsible has got to be one of them. In the current world we live in there are too many teenager and those in their early 20’s who are floundering on financial topics. One of the greatest responsibilities you have is to teaching kids about money. 

Young children seem to think that money just appears. This is mostly due to their innocence and lack of understanding. Middle school aged kids are starting to grasp the concepts but still sometimes struggle with delayed gratification. High school aged children typically have the knowledge but sometimes lack the ability to understand broader money concepts. All this can sometimes be overwhelming as a parent when you want to teach your kids about money.

Here are 5 Financial Rules you can use when teaching kids about money.

  1. Needs Vs Wants
  2. Money isn’t FREE
  3. Earn Before you Spend
  4. Allow Kids to Make Mistakes
  5. Teach them to budget

Needs Vs. Wants

As a parent this is a constant battle. When you are talking about money it’s your job to make sure you children know the difference. Wanting something because it looks good is not the same as needing food to eat.

Make sure when you are teaching kids about money, you stress the importance of needs, and telling them wants can wait.

Money isn’t FREE

Money is associated with work. If you don’t work,  you can’t have money. That doesn’t mean your kids should always be rewarded with money, however, you can ensure they work towards their goals.

Setting up age appropriate chores they get paid for or ensuring they get an allowance after having a well behaved week helps teach your kids the value of money.

Earn Before you Spend

Teaching kids they can purchase something and then earn money sets them up for a life of borrowing. This is troublesoe, so instead make sure you are teaching your kids about money and earning it prior to spending.

Allow Kids to Make Mistakes

Everyone makes mistakes. We are not immune to this, neither are our children. Make sure you let them make mistakes and make them into opportunities they can learn from.

Teach them to Budget

Financial understanding is so important and a budget is a big part of this. Letting your children be in charge of what they are getting for money and where it is spent is so important.

This makes them invested in finding ways to earn more when something is important to them. Most significantly it makes them accountable for purchasing the items they want.

Teaching Kids about Money

Teaching your children about money isn’t easy and it’s not going to happen overnight. But with persistence, ground rules and smart strategies you can help set your children up for success.

5 Budget Advantages to Make you Successful

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Having a budget is the #1 thing you can do for your financial well being. This simple yet effective plan allows you to manage your money and understand what you are spending. A budget does not have to be super complex nor does it need to be stressful to create. Here are 5 Budget advantages to make you successful! Just keep in mind that setting a budget is only the first step in financial success. You must stick to your budget to be truly successful.

budget advantages

Defines Objectives/Goals

When you have a budget, you end up needing to establish your long-term objectives. In turn, determining what your goals are. Some families have many goals; others have only one or two. It doesn’t matter how many you have, ensure you have defined them. You may not be able to achieve all your goals at first, and that’s ok. Work on the most important ones that will ensure financial stability first.  One of your most significant budget advantages is planning. Setting up goals allow you to project your plans to the universe. *** Pro-tip: Vision Board: What is it?

Forces you to prepare

Having a budget makes you sit down and prepare for purchases and future expenses. For example, almost every birthday in our family takes place between July and October. That 4-month stretch has an increased gift budget because we know we will need to spend more on gifts those months. Looking at the big picture of our overall budget allows us to put money aside in off months so that we aren’t struggling to make those purchases later. This applies to every area of your budget. From car repairs, clothing expenses, school fees, etc. Having a plan in place and a way to save for those expenses makes them easier to deal with.  *** Pro-tip: 15 Tips on How to Save Money

Set up an Emergency Fund

One of the most significant budget advantages is setting up an emergency fund. Most financial advisors and other business professionals recommend you have three to six months of living expenses. However, when first starting out having this much in an emergency fund may seem unrealistic. If that is you, set aside something between $750-$1,000 to help you in case of an emergency. If your car breaks down, the plumbing goes out, or something else happens you need a quick and easily accessible way to get cash fast. Having a budget allows you to save this emergency fund so that you don’t end up curled in the fetal position crying yourself to sleep not knowing how you are getting to work the next day. And Yeah, we’ve been in that position before.

Know when your bills are due

Budgets force us to pay attention to our statements and their due dates. If you are planning out when you will spend your money, then you need to know when that money is owed. This way if you have a bunch of bills due the first of the month you won’t suddenly be short because you made a big purchase on the 20th and therefore didn’t keep that money allocated as it should have been. ***Pro-tip: 5 useful ways to save money on utilities

Happier and Healthier

The last advantage to having a budget which will most certainly make you more successful in allowing you to be happier and healthier. When you start planning out your money, you will probably start to cut out unhealthy habits. Additionally, not stressing out about your money continually is sure to make you happier in life. Finding financial freedom among the chaos of today’s world is indeed a blessing and a huge stress reliever.

budget advantages

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