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When you embark on your own financial journey, you quickly realize you want A LOT more for your kids financially.
Personally, I don’t want my kids to know what it feels like to be drowning under a load of debt.
A question I get asked a lot is, How do I go about teaching kids about money?!
Of course, the answer isn’t so black & white.
Factors to consider include:
- The age of your kids
- Where you are in your own journey
- Your level of financial literacy
Here are some simple tips to help you teach your kids about money.
Simply open the dialogue.
I know that a lot of us wish that our parents would’ve talked to us about money or if they told us not to do something they at least explained why.
Take what you wish you would’ve known or been told and instill those things in your kids!
Money is still a topic many keep tight lips on but that doesn’t serve us.
If we’re struggling and in debt, we may feel like well that’s just how life is because we don’t know any better. We weren’t told anything different.
When something is openly discussed it becomes less shameful and more empowering.
When you speak to them, try to bring it down to their level. Incorporate things that they like or desire into your teachings to make this easier.
Pay them for their work
So, I don’t know about you but I grew up with parents who had the “You live here for free therefore I’m not paying you for chores” mentality.
I’m all for family traditions, but holding onto this mentality is a disservice.
It takes away the opportunity for kids to actually apply the things that they’re learning.
A lot of us didn’t get to be hands-on until we were already of age and thrust out into this world that revolves around money. It was like sink or swim...and I sank for a long time.
But depending on their age, create opportunities for them to earn money. To do this, I use the BusyKid chore app and my 8-year-old loves it!
You simply create chores for them, assign an age-appropriate price, and set the frequency.
Every Friday is a payday and a portion of their earnings goes to one of the three categories:
- Spend - For their fun money.
- Save - For savings. When you have enough set aside you can even purchase real stock directly within the app!
- Share - This allows them to donate to organizations directly within the app.
So not only does it help instill a good work ethic, it prepares them for the workplace. The cool thing is it comes with their own Visa debit card!
Get a clear piggy bank or money jar.
We are visual beings, especially kids. This helps to make saving money exciting because they can visually see their contributions adding up.
And depending on their age, whether they’re inserting a penny or a $20 bill, they’re still going to be excited.
If you don’t have a lot of money to spare, let them contribute the spare change you get after making purchases.
To take it up a notch, teach them about the perks of compound interest by agreeing to match a certain percentage of whatever they save.
This is especially helpful if they’re younger than the working-age because by the time they turn 15 or 16 saving money will already be a habit.
This is also a great way to teach them the importance of saving for what they want first. We all know kids think money falls from the sky and they want what they want and they want it right now!
If that is not handled early on then that money habit will follow them into adulthood in the form of impulse spending.
Try setting a goal based on one thing they want to purchase. Use the piggy bank or money jar as a type of sinking fund. Then, once they reach their target amount they can go out and make their purchase.
Additional money posts to check out next!
Continue working to be financially savvy yourself
This one is extremely important because our observations growing up define our money habits in adulthood. Don’t just tell them to do XYZ and you not do it too.
Whether we realize it or not, our children are watching us. And if you keep the dialogue open they’ll mimic some of your financial habits as well.
If your kids are 10 and up, take them on the journey with you.
If you’re paying off debt, explain to them why you’re paying off debt and share your wins as you knock down your balances.
I once had a client with a teenage daughter who was her accountability partner when it came to her sticking to her budget. This was brilliant!
Where you are right now is not something to be ashamed of.
What better way to start teaching your kids about money than to share your own struggles?
I can almost guarantee that they won’t forget the lessons they learn!