It’s a sad fact that with all the lessons schools teach our kids, none of them include anything about money management. Therefore, the only way your children will ever learn about being financially responsible at a young age is for you to teach them money management yourselves.
You probably think that talking to your kids about money is a bit premature, but it’s always better for kids to at least have an understanding of money matters early in their lives. Just keep in mind that your children will grow older, and they will surely benefit from the money management lessons you can give them when it’s their turn to be adults.
So what money management lessons will your kids find useful? Here are some ideas.
1. They have to work hard for the money
Your kids need to know that money is something you work hard for, and it doesn’t just come out of an ATM. With that hard-earned money, you are able to buy them food, clothes, school supplies, or just about everything they need.
2. Fulfill needs before wants
We all have needs and wants, but impress upon your kids that the former should be a priority over the latter. Tell them that needs like food and shelter should always take precedence over wants like the newest Playstation or the latest Steph Curry kicks.
3. Introduce the concept of delayed gratification
It’s perfectly normal for kids to want to get what they want right away, so it’s your job to tell them that things don’t work like that in real life. By teaching them about delayed gratification, your kids will learn about being patient, and how focusing on something more important and putting off getting what they want for another day can feel incredible once that day comes.
4. The importance of saving up
Saving up is a money management lesson that your children have to learn from the start. Give them an allowance for chores, and they can start setting aside part or all of their own money.
5. Teach them about creating budgets
Once kids have money and you never talked to them about managing it, don’t be surprised if they spend it all in one go. Sit your kids down and tell them about how necessary creating budgets and sticking to them are in the real world.
6. Expense tracking basics
More often than not, kids who earn but never had the benefit of a finance talk from their parents end up spending all they have without knowing where their money went. Teach them the basics of monitoring their spending so they can see which expenses can be cut.
7. Comparison shopping
By teaching them the concept of comparing brands and prices, you can equip your kids with the ability to make wise decisions when shopping.
8. Investments 101
Of course, you can’t just overload your kids’ brains with a full-on seminar about stocks, bonds, and other investment vehicles. Just introduce to them the idea that money can grow by making investments. Like how to buy RKT Shares. Who knows, your kids might actually be born entrepreneurs and will use their allowance to invest in a business of their choice.
9. Tell them the pros and cons of credit
You can’t talk to your kids about financial responsibility without touching on the concept of credit. After all, the world runs on it. Tell them how credit can be good, and also how bad it can get if it isn’t handled well. You can also discuss student loans with your teenage kids so they’ll know about its pitfalls at an early age.
10. Teach them the importance of giving
Your kids need to learn that giving to the less fortunate is just as important as earning and saving money. Tell them about charities and who or what their beneficiaries are so they can choose which ones to help out using part of their earnings. It would also be great if you teach them that aside from money, they can also donate their time to help causes that they feel about strongly.
There is so much to learn about money management, but the ones listed above should be a good enough place for your kids to start learning how to be financially responsible. With the knowledge they’ll gain from such lessons, your kids will be in a better position to deal with the realities of adult life and succeed.
About The Author
Samantha Green is the Content Marketing Strategist for BusyKid, the first and only chore and allowance platform where kids can earn, save, share, spend, and invest their allowance. A mom of two, she enjoys spending time with her kids and reading books to them.