Teaching Your Children About Proper Money Management
One of the most important lessons you could teach your children is the proper use of their money. The earlier you teach them these lessons, the better because then they won’t know of anything different. You don’t have to plan out these lessons either. Teachable moments happen every day, and you can use these moments to your advantage. Keep some of the following examples in mind, and you will find it very easy to teach your kids about money.
Introduce your children to money as soon as they learn to count. Show them the different types of currency and teach them the names and values of quarters, dimes, nickels, etc. Start to teach them how to add and subtract with money, and introduce more advanced financial concepts as they get older.
Lead By Example
Your children will learn most of their financial habits from the things you do. They won’t listen to your good advice if you aren’t following it yourself. Learn about proper ways to budget, save, invest, and use your credit cards wisely so that you can show your children how to do all of these financial tasks as well.
Another thing you will need to do is stay out of debt. This might be much easier said than done, but it is very important that your children know that debt is avoidable and it should be avoided at all costs. If you are already in debt, you should show your children that you are actively trying to get out of debt and succeeding with your goals. You should also start to create an emergency fund to cover unexpected expenses. When you have the extra money to take care of unexpected emergency expenses, you children will be able to see how important it is to have savings and stay out of debt.
Even if it’s just a few dollars a week, an allowance will help your children learn about saving their money for something important. From there, let them make their own decisions with spending their money, and learn from their mistakes. If they need more than what you give, make them work for it. They will learn very quickly what it takes to earn money and how important it is to save it if they want something special. With the proper guidance and encouragement, they will gain good money management habits that will carry on for the rest of their lives.
You don’t want to attach your children with tons of information at once and think that they will be completely educated in one day. Learning these lessons takes time and patience, just like everything else involving kids. Instead, find teachable moments in your daily life to teach them about money. When you’re at the grocery store, teach them how to compare prices to spend the least money, or you could let them hand over money to the cashier. Use play money while you’re making up your budget, and when you’re writing a check, show them how to balance your checkbook. There are hundreds of ways you could use your daily routine to teach your children about money. You just have to get creative.
Don’t Bail Them Out
As much as you may want to, you shouldn’t bail out your children when they’re in a financial crisis. They need to learn for themselves how to handle their own money, and they should learn from these mistakes. Give them advice as needed, but let them make their own decisions. At some point, you need to trust that you taught them well, and that their good decisions will outweigh the bad.