Have you ever wished that you learned about money earlier than you did? Most people do. The difference between wealthy people and poor people is that the wealthy learned about money early in life and used their skills as leverage to get rich. If you think that school will equip your kids with financial knowledge, you will be disappointed. A survey conducted by the Bank of America revealed that only 31% of high school leavers felt that their education had improved their financial habits. The following are five practical ways to teach your kids about money.
In This Post:
1. Rethink the piggy
Most of us grew up with piggies but do you know that these coin containers can be traced as far back as the 17th century? While a lot has changed in the material of make, shape, and color, these home banks have remained predominantly opaque. There is no doubt that a piggy bank is one of the easiest ways to teach children about saving. However, it offers little incentive to save. A better idea would be to have it in a transparent material. This would allow for kids to watch their wealth grow. Who doesn’t love to see progress?
2. Don’t preach water and drink wine
Most of the most valuable lessons that kids learn are through observation. You can’t teach good money habits when you can’t manage your finances. You can give lectures why credit cards should be avoided, but they make mental notes when you keep swiping them at supermarkets and restaurants. If you are a serial gambler, it will not be lost on them; it doesn’t matter what you say, you could be leading them towards the same direction.
3. Make use of technology
It is now easier to teach financial lessons to children than it was ten years ago thanks to technology. As kids understand the value of money, they ought to know that money is earned. It makes little sense to give allowances because the fundamental concept of money being the result of work is lost. The chore chart app is an example of a tool that can make it easier for parents to reward kids for chores done around the house. The app allows you to create chores and set their worth. When kids accomplish and click off a chore, their payout builds up. You will then be able to make payments during payday directly from a linked bank account. Kids can then choose to spend, save or invest their money all through the app.
4. Assist them to open a bank account
It is hard for individuals to open an account before the age of eighteen in the U.S. However, there are special instances when minors can be allowed to open a checking account. Some banks allow individuals aged at least fourteen to open an account as long as the parent is a joint account holder. Usually, the minor will have full access to services such as debit cards, withdrawals, money transfer amongst other bank services. An account can help teenagers learn how to manage their money and how to relate with financial institutions.
5. Equip them with skills to find a real job
Household chores wouldn’t pay much to fuel the financial needs of today’s teenage. The sooner your kids learn how to find jobs, the better equipped they will be to face the future. Therefore, coach them on the techniques of selling themselves. Employment can help teenagers to develop a strong work ethic and to be more responsible.
Money lessons are not easy to teach, and kids will not grasp concepts overnight. If you are thinking of it as a crash program, it will most likely backfire on you. Let it be a continuous process, and you and your kids will enjoy the fruits.