October 9th, 2013 - Category: Budgeting
As Parents, our goal is to help our kids grow up to be responsible adults. The life skills you teach them now will follow them and be the start of their independent lives.
Money management is a very valuable tool. Spending and saving habits can be taught at very early ages. In fact the earlier you start the more they will learn.
Here are 9 money management tips for teaching your kids about the power of a dollar.
1. Be a role model. Show them your budget. Take them to the bank with you and explain what you are doing and how it all works. I would suggest even sharing the “bad” financial decisions you have made with them and pointing out the consequences. Let them learn from your accomplishments as well as your mistakes.
2. Have them help you. Take them shopping and have them compare prices. Ask for their help in fining coupons. Let them help you plan a day out or a vacation so that they can see how expensive everything is.
3. Pay them. Whether you give them an allowance or pay them for chores, they can’t learn to budget their money if they don’t have any. And when the time is right, encourage them to get a part time job.
4. Bank it. Whether it’s a piggy bank or a glass jar on their dresser, give them something to keep their money in. Help older kids set up a savings account at the bank when appropriate.
5. Play with money. Read books about finance and even play money games. Monopoly is a great one.
6. Make goals. Help them set up short and long term goals for their money. Remember it is their money and you can make suggestions, but in the long run, it is their decision.
7. Make a budget. Help them set up a budget with their money. A good starting point? I would suggest 10% goes to church or charity. 20% goes to savings. 30% goes to bigger items that you need to save for and 40% can be spent immediately.
8. Don’t bail them out. When things get tough, don’t bail them out. Let them learn from the natural consequences of how money works and why a budget is important.
9. Keep track. If they keep a journal or ledger it will help them see where their money is going and help them keep track of where it will go in the future.