Best Ways To Teach Your Kids How to be Responsible With Money
As parents, we want what’s best for our children. Oftentimes, we want a better life for them than we had growing up. For this reason, we have to be careful not to go overboard and overcompensate. Children crave a balanced life with a strong sense of security, discipline, and love. One of the best ways to show your children how much you love them is to prepare them for the future by teaching them the proper use of money. Here are some of the best ways to introduce children to basic finance:
There’s a split debate about giving children an allowance. While it may not be for every parent, it is a valuable way to teach children how to earn, budget, and save money for sweets, games, toys, gifts, etc. If you don’t feel children should be paid for doing chores, consider this: ” Chores teach kids something unexpected – gratitude,” says Nancy Darling, Ph.D. “and the Dalai Lama says that a pervasive sense of gratitude is one of the 10 signs of happiness.”
Teach Them to Shop
Stores are a wonderful place to teach children about price comparison, bargain shopping, and money management. These money responsibility activities are great for students as well. If your child is old enough, have them be a part of the shopping process by giving them tasks to complete. Make sure to show them how to read and compare price labels on the shelf to get the best deal. If they are younger, have them help with the math.
Create a Store at Home
A fun way to teach children about money is to create a “dime store” at home. For example, find a space in your home and fill it with things like candy, toys, games, cool school supplies, etc. This provides you the opportunity to have more control over what your children are buying while still giving them the freedom to make their own choices and consequences.
Open a Savings/Checking Account
Another rite of passage is opening bank accounts. As early as possible set your child up with a savings account at a minimum. Learning to save money early will help prevent your child from becoming an adult who lives paycheck-to-paycheck.
Participate in Financial Decisions
Children want to feel included and will show you, often in the wrong way. When it comes to money, start by allowing your children to help you with making decisions while grocery shopping, on whether you should go out to eat, or if you should buy the newest tech device. By letting your child participate, not only will they feel included, they’ll learn responsibility and consequences.
Teach Kids About Credit Cards
Greenlight is a reloadable debit card for kids. With the app, it provides chore management, automated allowance, instant transfers, real-time notifications, saving goals, direct deposit, and more. Greenlight is the best beginner credit card for children. The smartest technique to teach children about credit cards when they are older is to choose a card with a low-interest rate, then have your check direct deposited to the credit card company (optional), next pay for everything with your credit card, pay off the card in full each paycheck (manually or by direct deposit), finally enjoy perfect credit.
Allow Your Child to Make Mistakes
Perhaps the most important lesson for parents is to let their children make mistakes. Of course, be there for them when they need you or if they are really going to do something to harm themselves or another. When it comes to money, it’s good for children to learn by trial and error. “Learning from mistakes is part of how we challenge ourselves to learn to do things differently. It motivates us to try new, innovative approaches to problem-solving,” says Marilyn Price-Mitchell, PhD.
Volunteer With Your Child
Teaching children about money isn’t all about spending and saving, it’s also about giving. Charity is a rewarding opportunity for your children to learn the value of compassion, donation, empathy, and love. By watching you volunteer regularly, your child will see and feel the normalcy of being a charitable person who’s considerate to everyone without prejudice.
At the end of the day, if you’re unsure where to start, ask your child what they know about money. Ask them to tell you where the money comes from? How do you pay for things? What is a credit card? Try not to laugh at their adorable answers. Let their remarks be your stepping stones. Know that you are their first introduction to money. So, do your best and allow room for errors and growth…in you too.