Parents have the responsibility of training their children to grow into successful, independent adults. For many parents, talking to kids about money can cause fear or trepidation. One big reason for this is that they don't believe they know enough about money themselves and fear they will give their children the wrong information.
Although discussing the topic of money with your kids can be uncomfortable, it is a necessary step in their development. Few schools teach courses on how to handle money the right way. Without learning money management skills at home, your kids won't be adequately equipped to handle the myriad of challenges that our monetary system can present to them.
Are you wondering what more you can do to teach your children solid money skills? Start with the following four tips.
1. Make Them Earn It
Knowing how to save, invest, and spend money is important, but one of the best things you can do for your children is to instill a good work ethic in them by letting them earn money on their own. Whether your teen works part-time at the movie theater or you help your little ones start a lemonade stand, the willingness to work hard and be rewarded is one of the best financial lessons you can pass on to them.
2. Include Them in Household Budgeting
Do you have a shopping or entertainment budget each month? Try including an older child in budget planning for the next month. Kids learn quickly when they have to stay home bored for two weeks because they blew the entertainment fund during the first half of the month. Another great idea is to set a grocery budget for an upcoming trip, make your week's list, and then take your child to the grocery store with you. As you place items in your cart, have your child add up the cost of each item until you hit your limit. This is another great exercise in making choices based on limited funds.
3. Gameify It
Turn budgeting and saving money into a game. Give your shopping lists to your younger kids and let them search online or in the newspaper for coupons and sales. Maybe you could promise to put a percentage of the money they save into a bank account for them to purchase something special down the road. You could even encourage older children to learn lifelong investment skills by participating in a stock trading simulator such as The Stock Market Game.
4. Let Them Experiment
One effective way to help kids learn how to make budgets is to give them a chance to make mistakes on their own. A small allowance each week is the perfect incentive for children to learn how to budget. Do they want to blow this week's money on candy and a cheap toy or save up a few weeks to get something they really want? Of course, some children will still be impulsive and want to spend their funds right away, but better they learn to make mistakes with $10 than $10,000.
These tips are only the start. Use the opportunity of teaching your kids about financial literacy to learn more about it yourself!
If you're a parent, you've most likely heard or read multiple passages in Bible regarding raising your kids. Once of the most popular in our day comes from Proverbs 22:6(NKJV) - "Train up a child in the way he should go, and when he is old he will not depart from it." I believe this holds some truth that we overlook at times. The associated time in this passage is a long one - all the way from childhood to old age. This is a long time. Many of us parents will never see the full fruit of raising our children during our lifetimes. We can have such a focus on the short term at times that we neglect the lasting impact our efforts now will have on our kids' futures. Don't neglect the time and energy you are putting into your child now. Just like a long-term investment, it takes time to pay off.
Another truth that this passage reveals is the fact that it is continuous. If you're nearing the time of one or more of your kids leaving the house, that doesn't mean that your influence stops. We never stop being parents, regardless of how old we get. Our continual involvement in their lives as they transition to more and more independence is also part of parenting, even though it may not be happening in the house. Our kids will continue to need our guidance and advice even when they get "old".
As parents, our children are our "arrows" that we prepare to fly to their respective targets. The legacy that we leave behind is the biggest goal that we can aim for. Let's prepare our kids for the best possible flight.
Evergreen Financial Group is a Fee-Only Financial Planning and Investment Firm located in Billings, MT serving clients in Montana, Wyoming, Utah, and virtually across the country. Evergreen Financial Group specializes in working with Christian families, including Young Professionals, Current and Future Retirees and Church Staff Members.