The following post is by MPFJ staff writer, Shondell of Call Me What You Want, Even Cheap. She blogs about her recent car loan and mortgage pay off and a whole bunch more. Check out her blog right here.
One of the most important lessons that your children need to be taught is about money. Children who are good at handling their own money grow up to be responsible adults with the potential to become wealthy. Unfortunately, this is one subject that is almost entirely left out in schools, so it falls on the parents to teach them this lesson.
So here are 10 money tips parents should teach their kids:
- “Money doesn’t grow on trees”: A lot of kids have no idea how hard their parents work to earn money. As a result, sometimes they become very demanding and want to have everything they see. This is of course is a recipe for disaster, and often times these children grow up to become spendaholics. Tell your children that money doesn’t grow on trees and that one has to work hard for it.
- “It’s cool to save”: Most kids want to spend their money as soon as they get it. Spending money makes them feel cool. To teach them to save money, you can tell them over and over that it’s cool to save and “uncool” to spend all of their money, explaining how they will be able to buy the things they want once they have saved up enough. Don’t forget to do the same thing in your own life, so the kids also see by example.
- “Open a saving account”: Once your kids have saved enough money to open a bank account, help them to open one. Find one that is child friendly. This will teach them a practical lesson about banking, which will come in very handy as they grow up. Encourage them to save every penny they can spare.
- “Be patient for the things you want”: By nature, children are impatient and want instant gratification. If you give in to all their demands, they will grow up to become difficult adults with wasteful habits. To encourage sound money habits, teach your children to be patient for the things they want
- “Keep track of your income and expenses“: Just like adults, children need to learn to keep track of their income in order to manage their money. If you are not in the habit of doing so, then it’s never too late to start a budget. Teach them to keep a record of every penny that comes their way and every penny they spend either in a notebook or an Excel worksheet.
- “Always spend less than what you have when buying anything“: Children rarely think of the future and spend every penny they have on the things they want. This often develops into a habit as they grow up. Teach your kids that spending all their savings is a bad idea. Teach them to spend, give, and save so it becomes natural when they are older.
- “Donate to charities”: Teaching children to donate to charities is a great way to show them the importance of giving back, for a more fulfilling life. Giving can teach children responsibility because they are thinking about others, and not only themselves.
- “Investing can secure your future“: Every child needs to be taught that smart investing can create a lot of wealth down the road. Teaching them the basics of investing and showing them some of the things you invest in, can give them a better understanding of what they can do with their money when they are older.
- “Use every income opportunity available”: Children who learn to earn money from an early age often grow up to become wealthy adults. Teach your kids to look for money making opportunities. They are all over the place, from starting an online business, to raking the neighbor’s leaves, shoveling the snow, and having garage sale. Teaching them to have multiple streams of income will go a long way once they are older.
- “Borrowing and paying interest can be dangerous”: Once children develop the habit of borrowing money whenever they need it, it becomes quite difficult to stop. This can land them in trouble again and again throughout their life. Teach them by example how borrowing and paying interest can be very expensive. You can even have fun with it, to teach them a lesson. Lend them some money and make them pay a high interest rate every month (similar to what a bank charges. Don’t forget to charge them a penalty if they are late). This will be a good way to teach them a lesson on the dangers of borrowing.
Some parents do a very good job at teaching their kids about money and some don’t. If you belong in the latter category, there is no need to lose hope. You can learn as you teach your kids and become a better money manager yourself in the process, which will go a long way in solving your own financial problems.
How about you all? What are some additional money tips you teach your kids?
Share your experiences by commenting below!
***Photo by Ingrid Callot