The 5 most important money lessons you can teach your kids
Financial literacy is always a hot topic in the media, as millennials and Gen X-ers continue to be the focus of “what not to do” pieces. If we want to make things better for the next generation, financially, we can start by teaching our own kids important money lessons.
How did your father handle money? Was he foolish, extravagant, cheap, conservative, or responsible? While not always, most people can trace their own fiscal habits back to those of their parents. If your dad taught you good money principles, then you’re probably thankful for his maturity in this area. If he failed to teach what you needed to know in order to be prepared for the real world, then you likely have some scars to prove it. [Good Men Project]
- Money is finite: the saying “money doesn’t grow on trees”, is especially relevant to children. When they see you using a credit card or an ATM, they may not understand that money isn’t just readily available, that you have to work for it and that it’s earned.
- Budgets: start teaching kids young about budgets. If they receive money, allow them to assist you in breaking down what they can afford with that amount of money.
- Saving: try to combat the “spend now” mentality in kids by enforcing that putting money away allows them to purchase bigger items down the road. Use some relevant examples.
- Keeping track: develop a system to track where your child’s money is going, so that they can see how a budget really works and how to plan for the future. This will come especially in handy for them later in life when it comes to saving receipts, etc.
- Prioritize: help your kids make a list of what they want to spend their money on, and then prioritize that list. This helps open discussions about what’s really important and where money should go.
If you have other money teaching tips for kids you’d like to share, let me know about them on Twitter.
