Also, while you’re teaching your kids about money and these money habits, try and live them yourself as well. After all, our kids are watching everything we do and learn from us by default.
So the way you handle money and debt is inevitably the way that one day your son or daughter will handle money and debt.
Read on for six great money habits to teach your kids to help them on the way to being financially savvy adults.
6 Good Money Habits to Teach Your Kids
1. Earn to Learn
Rather than simply doling out pocket money each week, consider making it dependent on jobs done around the house. This will teach your children that if they want money when they grow up, they will need to earn it.
To do this, draw up a list of jobs for each of your children. They don’t have to clean the whole house! Simply a few small chores they can do to help out would work.
If your child does all the jobs allocated, he or she gets full pocket money. If they go above and beyond and do jobs not on the list, consider giving them a little extra as reward.
2. Budget for Success
When you teach your children about money, you are teaching them that everything material has a value, and that in order to have that object you need to work for it. A great way to do this is to help them create their own budget plan.
Whether your child wants an iPad or a Lego set, show them how to put aside some of their pocket money, or perhaps some money they got for their birthday or Christmas.
Make sure they understand what their savings will add up to in a given time, this will also help with their maths skills!
A great way to teach your children how to budget is to start by showing them how to keep a list of all their incoming and outgoing money.
For older kids, use a spreadsheet, and for little ones, use a piece of paper. You could even paste a picture of the object of their desire at the end to keep them on track.
3. Be a Savvy Shopper
Your child’s day is filled with exposure to material items and financial transactions, so use these opportunities to teach them how to become a savvy shopper in the future.
Kids love the Internet, so show them how valuable it can be as a tool to find great shopping deals, coupons, and do price comparisons.
And when you’re shopping with younger children, explain to them how money is exchanged for goods. When they’re old enough, let them count out the money and pay for the goods.
This experience will give them a great sense of financial confidence and a lesson in how the world works.
4. Sharing is Caring
Teach your children about giving when they’re young so that they carry this habit forward when they are older.
Show them how to give to those less fortunate by doing so yourself; if you’re not already donating a small percentage of your income to a favourite charity, this may be a good time to start.
Ask your child if there is a charity or issue they are passionate about and show them how they can donate a small amount from the gifts or pocket money they receive.
If they see you are already donating, they are much more likely to want to join in.
5. Use Credit Wisely
Once your child is older and has an understanding of basic money management, it’s time to talk to them about how credit cards work.
Before you talk to your child about using credit, explain how dangerous it can be and how it shouldn’t be used at all if possible.
Explain the negative impact that credit can have on one’s life, and how it can lead to a spiral of debt.
Be sure to point out the dangers of credit card debt, the perils of high interest rates, and the importance of paying off your balances on time and in full each month.
Explain to them the most responsible way of using credit cards. If you use a credit card in your daily life, explain to your child how it works as you use it. Without an explanation, it can seem like free money to a young mind.Be sure to explain the negative impact that credit can have on one’s life, and how it can lead to a spiral of debt.Click To Tweet
6. Be a Saver
The most important money habit to teach your kids is saving. Start by opening a savings account for them and encourage them to deposit their birthday and Christmas money in it, as well as some of their weekly pocket money.
Help your child review their bank statements each month and explain the concept of interest; hopefully seeing interest accrue will be an incentive to keep saving as much money as possible in the future!
Having a savings account will also help familiarise your child with banking, giving them greater financial confidence in the future.
Over to you…
What great money habits have you taught your kids? We’d love to hear from you!
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