In the past, people viewed money discussions amongst family members as unnecessary. Families mainly focus on things such as religion and healthy living. However, it’s important to find resources on how to teach your children about money as a parent.
We all agree most children learn most of the essential lessons from their parents. And this is one of the best gifts you can give your children. They miss a crucial aspect of life regarding their financial footing if they don’t.
For this reason, here are some actions recommended by an experienced Philadelphia bankruptcy attorney on how to teach your children about money.
1. Help them Build their Budgeting Skills
The first important step will be to help your kids differentiate between their needs and wants. The best way to do this is by explaining your home’s budget to them.
First, draft a list of the basic needs such as food, shelter, and clothing. Then, write down a list of the extras, such as taking road trips or buying the latest clothes.
Explain the first list is what you need to keep the house running, while the second list contains things that are nice to have but not necessities. Building these skills will help them know to be better financial managers of their money later into the future when they are required to step in.
2. Explore Ways to Help them Earn Money
It’s the responsibility of every parent to provide for their kids. However, when teaching good financial habits, you can reward them for performing chores around the house, such as cleaning their rooms or dusting.
Of course, some of these tasks don’t need payment, but paying them once in a while helps create value for what they are doing as it instills the importance of hard work.
Allow them to treat this as “their money” that they can use however they want. This way, they will also learn how to save the money they have worked for and use it.
3. Help them Build a Savings Routine
The important thing is not to make them save money but to let them know why they are keeping it. To help your kid stay motivated, you can help them set a goal geared towards spending on something they like.
For instance, if they want a bike worth $100, you can break down the math by telling them how long it will take them to get one based on how much they save. Also, you can give them a boost in their savings to keep them motivated towards the end goal.
Saving instills the necessary discipline needed to help them manage their spending habits in the future. In addition, it would be good to direct them on keeping their savings safely. For example, you can provide a piggy bank for them or help them set up a bank account to track their savings.
4. Let them Learn from their Mistakes
Failing is the first opportunity to learn something new. Every stride you make is a chance for your kids to grow and learn. As much you would want to guide them in everything, they may choose to do things their way and end up failing.
At times, their mistakes may be costly, but they learn from these mistakes eventually. Just encourage them that they have another chance to make better choices. Ultimately, they will know the dos and the don’ts of how to use their money.
5. Celebrate their Wins, however Small
Any milestone made financially sums up for a big win for any child. This is why you have to come up with a way to celebrate your children whenever they make a reasonable milestone financially.
If you acknowledge and celebrate their wins, it builds up their self-esteem and further motivates them to make more remarkable strides towards achieving more.
6. Teach them the Value of Charity
Humanity is the first step to building a better society around us. If you teach your kids these values early enough, they will carry them on to their adulthood.
Therefore, train your kids early enough on the rules of saving, spending, and giving. Then, help them identify volunteer organizations or platforms to help donate to deserving individuals. This will go a long way, even for future generations.
Here are some tips for saving money this summer.
Every parent has a unique way of teaching their kids financial responsibility. The end goal is to make them learn how to. The process is never that easy, and it requires a lot of patience, but it sets a good foundation for better financial decisions in the future.
