Financially successful adults do not happen by accident. It is a must to teach your children the principles of sound personal finance so they will not have money problems later on. The tips below will show you how.
- Talk to your kids about money.
Have regular discussions about spending, saving, and even banking with your children. This is not to say that you should burden them with money issues or any family financial hardship but just general discussions that allow them opportunities to learn how to make financial decisions.
- Start early!
You can teach your kids about money as early as five years old. Of course, education will focus on the basics and not the current state of the stock market. Help them to understand the that things cost money and how that money is made and handled.
- Let them handle their money.
If you want your little ones to grow up to be financially responsible adults, you have to let them handle money often. And yes, even if it means blowing their money on wants and not having a budget for needs. They need to learn these lessons and make mistakes that you can guide them to correct later on.
- Set limits.
While you want them to handle their own money, there are limits, of course. Set limits to ensure their mistakes remain on a small scale. Give them enough money to learn about financial principles and make their own decisions but not too much that they start thinking money grows on trees.
- Structure your lessons.
Children need structure. This will help them find consistency in writing their budgets and making their spending and saving plans. A system is important so that they can learn sound money principles on their own.
- Be a good example.
Your kids see how you handle money and pick up on your habits. Even if they do not say anything, they observe your financial decisions and are likely to think these are correct. Be very careful in the behaviors you model in front of your children.