It is never too early to start teaching your kids about smart money habits. As soon as they are old enough to receive an allowance, they are old enough to learn about how to handle their money. For instance, if they want a new video game, don’t go out and buy it for them. Teach them how to save their money so they have some to spend and will still be able to get that game they want so badly. Here are eight more tips that will help you to teach your kids smart money habits.
1. Teach them what Stuff Costs
Most kids don’t have any idea what things really cost, because their parents buy it all. Talk to them about what things cost
, and not just the stuff you buy. Take them around the house and show them how hot water costs more than cold water, how turning up the heat makes bills increase, etc.
2. Set a Good Example
Kids emulate what they see, so if you have bad spending habits, they are going to end up in the same boat eventually. Set a good example by paying bills on time each month, not spending money on foolish things you don’t really need, etc. If you are extravagant with your spending, they will be too, but if you are frugal, they will learn this instead.
3. Reduce Ad Exposure
Most kids tend to want everything they see advertised, so you need to cut down on the amount of advertising they see. Record programs for them on television so you can zap out the ads before they watch them. Buy DVD’s, which have no commercials at all (except trailers for other movies). Limit their time online, and the sites they are allowed to visit.
4. Sell Used Stuff
There are always going to be toys that your kids stop playing with, and then there is going to be a bunch of clutter with all of those unused items. Teach them that they can make money for other things buy selling the things that they no longer use. For instance, if they have used laptops, iPads, etc. and they want to upgrade, show them how to sell a used laptop
to make money for the new one.
5. Talk about Money
Many parents make the mistake of keeping financial details hidden from their kids. The better thing to do is to let your kids know about the family’s financial situation. If you are in debt, don’t keep your kids in the dark about it. Tell them what is going on, and then let them help with suggestions on how to get back on track financially.
6. Distinguish Wants from Needs
There are things that everyone wants, and then there are the things that everyone actually really needs. You need to be able to distinguish wants from needs, and then teach your kids how to do the very same thing. Someone in the family may want something really expensive, but it has to go by the wayside until the actual needs are taken care of.
7. Take them Shopping
Your kids don’t see how much money is spent on the items your family uses every day. So, take them shopping with you
, and make it an educational experience. Let them see the decisions you make about which items are the best value, and how to get as much as possible for as little money as possible.
8. Avoid Lifestyle Inflation
When people earn a lot of money, they often tend to enjoy a more lavish lifestyle. This is fine and dandy, but when the money runs out, it can be hard to go back to a normal lifestyle. If you have a good income, live well within your means, and teach your kids to do the same.