Four practical lessons you can teach your kids to help them live financially smart lives
Good money management is arguably one of the most valuable skills you’ll ever pass on to your children. And whether you have toddlers or teens, it’s never too early to start teaching them about money.
One of the most important lessons you can teach your kids about money is that you have to work for it. Pay them pocket money for helping out around the house, or help older children to find a part-time job. Your kids will think twice about spending their money when they know how hard they’ve worked for it!
Budgeting starts by setting a goal and then coming up with a plan to achieve that goal. So if, for example, your child wants to buy a new bike, help him figure out a way to earn and save enough to do so. A good idea is to give your child two jars or envelopes – one for spending and one for saving. When you give him his pocket money every month, he should put at least a quarter into the savings jar or envelope and the rest into the spending one. This way your child can keep track of his spending as well as how far he is from reaching his goal.
If your child has spent all his pocket money and comes running to you when he suddenly needs cash for something, don’t give in! Explain to him how this situation could have been avoided if he had planned better. Encourage your child to put loose change in a piggy bank for rainy-day situations like these.
Take your children to different stores to show them how the same item can cost more or less depending on the store or brand. This will teach them to compare prices and to shop around until they find the best deal.