Having four kids means we think about our finances on a regular basis! It also means that we have to say no to our kids fairly often. It seems like they always want or need something. If we said yes to everything, we’d have no money ever!
Don’t get me wrong there is a part of me that wishes I could buy my kids everything their little heart desired but would that really benefit them? I strongly believe that by not giving into their every desire is teaching some life-long financial lessons and my goal is to raise financially savvy kids. I have put together some tips for raising financially savvy kids and I hope it helps you out within your own home.
5 Tips for Raising Financially Savvy Kids
1. Talk about finances with them. I know a lot of people say kids shouldn’t worry about adult stresses and while I do agree, I think kids should also have a basic understanding of adult finances. Now this doesn’t mean you have to tell them that you’re struggling to pay the mortgage. However, you can let them watch you pay the bills or watch you budget for the month. You can also explain that you only have a certain amount to spend on groceries which is why they can’t have 5 boxes of fruit snacks. The goal here is to get the kids involved.
2. Help them set up a budget for their own money. When your kids get money for their birthday, Christmas, graduation or any other event help them set up a budget. We all know how it feels to get some extra money and feel like it’s burning a hole in our pocket. Don’t let this happen! Sit down with your kids and come up with a savings and spending budget for their money.
3. Make them save for items they want. Does your child want the latest toy or video game on the market? Great, make them save for it! Typically, I only buy my children toys and electronics at Christmas and birthdays. Outside of those two occasions, they have to save for any wants they have. Not only has this made my children appreciate the items more but it has taught them the value of a dollar. Sometimes, I will have them save up for the whole item and other times I will pay for half.
4. Help your children set up a bank account. One of the best things I have ever done with my children is having THEM set up a bank account! They got to go through the process of being at the bank, setting up the account and depositing money into the account. One of my children is now 19-years-old and it’s awesome to see him pay his own bills, set up recurring payments and truly understand how to balance his money.
5. Teach them ways to earn money. Children are always going to have wants, as adults we always have wants but we have to find a way to pay for those wants. Teach your children age appropriate ways to earn some money. Even young children can earn some extra money by making and selling crafts, doing yard work, babysitting, chores or anything else they can think of.
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