As a subject, money can slip through the cracks between family and school, leaving many children to learn it on their own. The problem is that, without proper guidance, they may miss the fundamentals like saving, balancing a budget, and avoiding debt.
This can lead to serious stress when they grow up.
To help your kids become money-smart adults, here are three things to keep in mind:
1. Don’t wait to educate
Many children can understand simple financial concepts as early as five, which is a good time to teach them about the value of dollars and cents.
Another great tool for teaching money management at a young age is an allowance. With an allowance, children start to learn the importance of not spending all their money at once. If you don’t love the idea of giving your kids free money, create
a system where they can earn it through chores or tasks.
2. Have them open a savings account
Once your children start receiving an allowance or regular income, have them set aside a fixed amount for savings. Explain that savings are important for things they want, but can’t afford right now. You can even take them to a
Spectrum Credit Union branch and have them open a MySavings Account.
3. Share successes – and failures
As your children’s money mentor, you should share examples from your own life once your kids are a little older. Did you pay off a credit card recently? This is an opportunity to explain the concept of debt, and why it’s crucial to eliminate
Of course, no one’s perfect. If you over-spent and blew your budget last month, don’t sugarcoat your mistake. Talk to them about where you went wrong, and how you intend to do better next time. Honesty lets them know that it’s okay to
make – and learn from – mistakes.
These three ways can really help your kids become money-smart adults. Start early, build them up, and be honest about the process. The future of their financial wellness will thank you for it.
BALANCE is an amazing resource for all our members to utilize when taking on life's milestones. With trusted guidance available for free, they are ready to help everyone on the path to financial wellness. This article and many more can be found on their website: balancepro.org.