As children grow older, they become more and more aware of the importance of money and its uses in the real world. It can be scary for parents to think of their kids as one day being financially independent, and some may even feel like that will never happen. However, parents can encourage their kids to be financially successful by teaching them about the value of money and how to be responsible with it over the course of their life. It may seem like a difficult topic but teaching kids to respect money and be responsible will be a lesson that lasts a lifetime.
Parents can plant a positive seed in their children’s financial future by setting a good example with their own spending and planning. Showing children that you don’t believe in wasting money and that you do stick to a well thought out budget will instill these habits in them from a young age. Don’t buy things that you can’t afford, and don’t spend above your means. When you avoid the stress of low funds and high debt, your children will see that your decisions have led you to be happier in life overall than if went for the flashy cars and bright lights.
Aside from simply being a good example, you should teach them about your choices and why you are making them. Tell them relatable stories about people you may know who are in over their heads with debt or who still have to work in old age because they didn’t save for retirement. Teach them that they can save money by researching what stores have better prices and by purchasing generic brands for things such as medicine, household goods, and food. Teach them the value of financial planning sites and services like Propillo. Children like to learn, so allowing them to be involved in some of the budgeting process may be a fun project for them and will help them to understand why you make certain financial decisions.
When your kids are old enough to perform chores around the house, you should assign tasks to them and put them on an allowance plan. Discuss this allowance with your spouse or other household guardians and decide what seems to be the best plan based on your budget and chore list. Teach your child that if he or she spends the allowance before the next pay date, then they won’t have any money unless they opt to perform additional chores. This will help them to understand the importance of budgeting and saving money. They will feel accomplished and proud when they finally save enough money for that big-ticket item they’ve been waiting for.
If your children follow your example and learn to budget and save for themselves while they are growing up, it will translate to responsible financial behavior in adulthood. If you set the right example for them as a parent, they will see it and know that it is the way to go. It may be scary to think of your child as independent, but with the right training and parenting, it can be a breeze.