Whether we like it or not, we live in a society where money is extremely important. While it doesn’t have to be what rules and motivates us, we definitely need to understand how to manage our finances and that type of education is important from an early age. For that reason, it’s necessary for us to teach our children now about making money and budgeting their income .
Here are three tried-and-true suggestions for helping your kids understand how to be financially healthy in the future.
Give Them an Allowance
It feels like kids have been earning an allowance since the beginning of time which, in some ways, is proof that it has value. Choose an amount that you can be comfortable with that is also age appropriate. Connect the “payday” with specific tasks (keeping room clean, doing homework, never being late) and decide on the penalties associated with failing to complete them – and stick with it. Don’t feel guilty when you have to withhold the full amount, it’s part of the learning process. It allows kids to understand that there are financial consequences for not following through on obligations.
Let Them Work
Of course, if your child is going to school, it might not be a good idea for them to try to have a full-time job. A part-time job, however, that has regular, reasonable hours, can be a very good thing for your teen. It will teach them how to manage their time, have respect for authority and give them a real sense of how much effort it can take to earn a little money. Soon, they will begin to realize that money really doesn’t grow on trees and that we all have to work for it. It may be an eye opener for them to realize what a minimum wage paycheck really looks like.
Teach Them to Budget
This is a really broad area but probably the most important. Most of us can make money but it’s what we do with our earnings that make all the difference. Show your children how to allocate their funds to cover different expenses, show them tricks for saving money (coupons and loyalty cards, for example) and let them shadow you around the grocery store and ask them to estimate the cost of the content of your shopping cart. This awareness will stay with them into adulthood.
Many of us still struggle with keeping our finances under control which is all the more reason to take the time to help our kids develop good habits at an early age. While you teach them lessons, you might learn a few things yourself!