We strongly believe that when you teach your kids about money they’ll have a better understanding of how life works. You do not want to send them off into the world and not know how to save a dime, or better yet, when they go to college they get so excited about having a credit card but they do not understand how to use a credit card! We’ll show you 10 tips on educating your children and have them on the road to financial success!
1.) Start them young, as young as the age of 4.
This is so crucial. At this age, they are absorbing any and everything their little minds can succumb. They are like sponges and this is the best time to teach them. We taught our kids about three categories: saving, giving, and investing. Kids should know that money doesn’t grow on trees and that you should work in order to receive money. Hard work equals money. When you do not work, you do not get money; it’s as simple as that.
2.) Give them an allowance or commissions to demonstrate when they work they receive money.
Like we said before, kids are a sponge and they absorb anything. When they watch by observing, they’ll be able to get that hands on experience on reaping the rewards of their hard work. When kids have their own money, it’ll teach them to be responsible. It’s so funny how kids are willing to spend and go all out with their parent’s money but when it comes to their own money, they’re extra cautious on how they spend it! That’s another topic.
3.) Teach them about saving, investing, and giving.
We have three jars labeled savings, investing, & giving so when each time they work for their money, they put their money into all three jars. Teach them about how important it is to save and give them examples for each jar. For example, for the savings jar, they can save for a toy that they’ve been wanting or a trip to the candy store. For the investing jar, teach them that you’re saving now to reap the bigger rewards in the future. They may not understand but you can give them an attainable goal like owning your own amusement park in the future (hey, it’s do able). Last, but not least the giving jar. We believe in tithing in our households. Teach them that when they give or tithe that they’re making the world a better place. They’ll thank you later for teaching them about these three categories.
4.) Teach them between wants and needs.
It says something when you walk into a store and you see a kid kicking and screaming because they didn’t get a toy they wanted. The difference between wants and needs is so important in a kid’s fundamentals of learning about money. You do not want your kid growing up thinking that they have to get a new car every three years just because they want a new car when they are an adult. Explain to them that needs are food, toilet paper, clothing, water & having a roof over their heads. This builds a strong foundation for them when they become an adult.
5.) Consistency, Consistency, Consistency.
When you decide to teach your kids about money, please be consistent in doing so. If you tell your kid to save for a toy, but then the next time you’re in a store and you just buy the toy for them just because; you’re setting them back for financial disaster. Show them how far they have come with their savings jar. Give them an attainable goal so they won’t give up on their savings journey.
6.) When they become teenagers, go open them a bank account.
One cool thing that I give credit to the banks is that they offer teen accounts, high school checking accounts, or whatever they want to call them. This teaches kids about the fundamentals of having an account so when they turn 18, they’re not in the dark about banking. The neat feature about these accounts, they won’t be able to overdraw the account because they’re still minors. Do your research on what banks offers these products. They are beneficial on your kid’s financial success.
7.) Teach them the good and bad of credit cards.
When we were working in the banking industry, the banks LOVED the kids who just turned 18 because they were so naïve on credit. The banks preyed on the young adults. When we were in college, credit card companies were so eager to offer credit cards because of the earning potential of college students. It’s so sad to say but it’s so true. You have to teach your young teens and young adults the importance of credit but at the same time why they’re so bad. Debt is no joke and the average young adult between the ages of 18-24 are in $22,000 in debt according to studies. Credit is a good tool to help you build wealth and to do business; it’s even essential to have good credit to get a job! I know if you want to work in the finance industry, you need good credit to land a job.
8.) Be a role model and set a good example.
These little minions are watching your every move. You need to be the best example when it comes to even your money. What we do matters. If we’re lying to our spouse or partner about money or purchases, how does that make you look. You’re encouraging that behavior. Also, remind them that money is not everything and having the most money does not constitute happiness!
9.) Nothing is more important than open communication
In this whole process of teaching your kids about money, it’s important to have the intense conversations about money. Whether you talk about it at the dinner table, or scheduled a weekly meeting with the family; it’s important you’re having that discussion about money. Always keep that open line of communication.
10.) Have fun teaching your kids about money.
Yes, the goal is to teach them about the fundamentals of money but also make it fun for them. Give them praise when the time is right, have a savings contest, watch videos on money, go to a garage sale and see if they can snag a bargain, have no spend Mondays etc. Whatever you do, make it fun!
Written by Brittany