Teaching your children smart money management is one of the most important lessons you will ever impart. Your kids will need financial skills throughout their life and teaching these skills early can help your kids avoid the many financial pitfalls of growing up. Kids as young as three are able to understand basic financial concepts like saving money. Here are five ways you can teach your kids how to spend and save wisely.
Clip coupons together
Young kids can enjoy helping you clip coupons before going to the grocery store. Use this as an opportunity to discuss ways to save money and how you plan what you want to buy ahead of time to avoid impulse spending. Ask your child to hold the coupons at the store and look for the items so he can feel like he’s helping.
Open a child savings account
Take a trip to the bank with your child and open a savings account in his name. At home, set up jars for spending and saving so he can put aside part of his allowance to deposit in the account each week.
Set savings goals
You can encourage your child to set aside money in a savings account or piggy bank by helping them set goals with rewards. For example, you can give them a bonus for every $5 they save or take them out for a treat for every $20 they save.
Demonstrate that everything costs money
Telling him that the toy he wants costs $10 won’t go far in instilling a sense of value. Instead, help him count out money from his piggy bank before you go shopping. Let him know how much the item costs and how much he will have left over. Make sure he is the one to physically hand over the money to pay for the item to make a strong association.
Set a good example
Your kids watch everything you do. They will take notice if you pay for everything with plastic, stress about money, or have arguments with your partner about the finances. Set a good example by creating a household budget, setting aside money in your savings account each month, and getting out of debt.
Your kids pick up more than you may think, even at a very young age. An Austin mortgage lender says kids can manage basic financial concepts from as early as preschool. As they grow older, you can introduce them to more complex concepts involving the handling and management of money. Help your kids succeed in life and stay out of debt by giving them financial lessons as they grow.