Teaching your children about financial responsibility is a fundamental part of good parenting. The earlier you encourage your child to develop personal responsibility towards money and teach them how to build a positive money mindset, the sooner they will learn the value of hard work and how to take care of themselves. Except for a few business electives available in some high schools, money management and financial responsibility are not skills taught in school. This is why it is so crucial that parents provide this knowledge so that their children can live with the abundance they deserve. Read more here are the main reasons to instill your child with smart financial habits.
To Teach Familiarity
By the time your children have turned about six years old, they will have learned the basics of adding and subtracting, and they will be old enough to handle a few light chores around the house. You can take their knowledge a step further by teaching them the value of coins. Show them how to add dimes, nickels, and quarters together, and practice counting money with fun items like M&Ms.
By routinely practicing counting money with your kids, you will give them more opportunities to become familiar with money, preparing them for the real world. Consider using the knowledge they’ve acquired through school and your help by implementing a weekly allowance. Your kids can learn how to do some basic chores and feel proud that they’ve earned their money.
Debit card for kids
Another way to foster healthy financial habits is to introduce a debit card for kids. Since cash is quickly becoming obsolete, some card providers offer prepaid debit cards tied to your kids’ allowance as a money teaching tool. Parents can control the amount of money on the card and track transactions. What a great way to give your kid a chance to practice money making under one framework! Giving your kid a prepaid debit card will also show them that they are able to act responsibly with their money and purchases, helping them grow the confidence they need to act independently as adults.
To Teach Kids Perspective
Kids might think that they’ll be able to afford the kinds of loft apartments and fancy cars they see on their favorite shows. It’s important to teach your kids the reality of money, especially how far one dollar gets you. Why is it important to save and find work that is fulfilling? Answer this question in detail and stress the essentialness of these facts of life. These conversations tie into the need to get a college education and pursue higher learning to make the kind of money they will need to provide for themselves and live comfortably.
To Teach Gratitude
You do want to stress the importance of a financial abundance and why having financial freedom is essential to living a happy life. But it will also help if you teach your kids how difficult life could be without financial support. By giving your children chores and perhaps, getting them involved in charity and donation drives, you will instill gratitude in your children by showing them how much money allows them to live freely. They will appreciate the value of their earnings so much more when they see how a lack of financial security disrupts one’s happiness. Introducing your kids to this balance of needs and wants will also give them a level head about money, curbing any future potentiality of impulse spending or attitudes of greed in the process.
To Start them Out Right
When kids are thrown to the wolves without financial teaching, they’re more likely to spend recklessly or misunderstand how to preserve the money they make for the things they genuinely need. Teaching your kids how to stick to a budget, plan for big purchases, and pay their bills on time will set them on the right track as they become more independent. Your freshmen in college will have an easier time affording rent and paying utility bills when they know how vital these things are to their lifestyle and wellbeing.
To Foster a Strong Work Ethic
Getting comfortable working hard is like training a muscle. Parents should provide for their children, but children should not have everything handed to them either. Giving your child some responsibility around the house when they are young and encouraging them to get part-time jobs during their teen years will foster a strong work ethic as they will learn the value of hard work. You can teach your kids that working hard can be enjoyable when you do something your passionate about and when you know that you’ve earned your keep.
To Help Your Child’s Credit Thrive
Everyone starts with a clean slate. Please help your child avoid accumulating debt and poor credit by teaching them smart ways to save and spend early-on. You can introduce your kids to prepaid debit and credit cards so that they can practice spending wisely and in ways that reflect positively on their credit score. Teach your kids how fundamental these numbers are viewed when it comes time to make significant purchases like a new car, home, or apartment rental.
To Help Them Keep Up
Kids with no exposure to money management often feel lost when making and keeping track of money. Without knowing how to make or keep a budget, save, or even count change, adults without the benefit of having had parents to teach them these skills will feel thrown in all directions. Be sure that your kids avoid money traps and that they understand how money works so that they can grow up to be the responsible and happy adults they deserve to be. Don’t let them drown in debt because they knew no other way. It’s your job to inform them about money management skills.
Most financially healthy adults first required parenting to get there. Be there for your kid and teach them how to handle money responsibly.