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.
- Needs Vs Wants
- Money isn’t FREE
- Earn Before you Spend
- Allow Kids to Make Mistakes
- 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.
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.