Teaching Your Child Financial Responsibility
There is so much knowledge to impart to your children as they grow, and one of the most important things they will learn about is how to handle money. Check out the following ways you can approach this topic.
1. Offer them the chance to earn an allowance. No matter what assignments you designate for them to earn money, from household chores to improved grades, you can instill a good work ethic, beginning at any age. Don’t be lenient when it comes to payouts; make sure they keep their end of the bargain.
2. Give them different ways to earn money. In addition to their regular allowance, periodic events which warrant extra effort should be turned into a financial responsibility learning opportunity. A snow storm, for example, which mandates that every able body pitch in somehow, is a great time to show your kids that when they go above and beyond, it can be very rewarding.
3. Emphasize the importance of saving. Kids are often all too eager to spend what ever money they have on things of little value, like candy or cheap toys. Redirect your kids toward goal setting and eventually obtaining really worth while items, rather than the instant gratification that comes from quick spending.
4. Use money-themed games to teach. Who didn’t grow up playing Monopoly at the family dinner table? Such activities can be a great opportunity for learning about money, as well as providing quality family time. Try different games that provide a variety of earning, spending and cause and effect situations.
5. Show them the process. Tell your kids that it cost money to have the lights or computer on, open the bill right in front of them and let them see you mail the payment. Doing this consistently will get the point across that in life, you have to pay for the things you use and want.
6. Charity begins at home. Sometimes, giving up money to someone less fortunate can teach a child the greatest lesson of all with finances. Learning to be unselfish and giving is commendable and usually comes with a lot of other valued and admirable characteristics.
7. Demonstrate the banking process. Showing your kids how the bank works through deposits and withdrawals, as well as how to balance the books is extremely important to early development of cognitive financial responsibility habits. It should come as no surprise to a 16 year old that writing a check with insufficient funds will cost you!
8. Bring them grocery shopping. Making the list, preparing with coupons and watching for sales, as well as price-comparison shopping and keeping a running tally are all excellent exercises to get your kids ready for the real world. They will understand the important concepts and procedures involved with providing food for themselves in an economical and thoughtful manner.
9. Protecting their money. Kids lose things, money should never be one of them! Show your kids, even as young as toddler ages, that you need to be able to keep track of your funds. Piggy banks are a great learning tool and preparation for the real thing.
10. Consider an introduction to retirement savings. Once your child has a good grasp on financial responsibility concepts and on-goings, let them know about retirement and other long-term savings strategies. The earlier you plant these seeds in their minds, the earlier they are likely to begin putting them to good use!
Taking the time to teach your children the importance of money management now should help them to be more capable as the adults they will become in the future. What better return on your investment of time is there?
