Kid’s brains are like a sponge. If you teach them something at a young age, then it is highly likely that they will remember those lessons for ever. Take advantage of this and teach your children some basics about the best ways to handle money. Teens and young adults are not really experts at managing their money. We put together this basic list of things to teach your kids about money.
Start Saving
This is a great lesson to teach your kids about money. Saving more than you spend is something they can take with them throughout their lives. This is also the oldest lesson in the book of money management.
Kid’s always want something, whether it is a new video game, laptop, or phone. A great way to teach them the lesson of saving is to not go out and buy it for them. Tell them to save up for it. Although they will probably be frustrated at first, they will get much more out of the product if they have to spend their own money on it. In most cases they will take better care of it as well.
Even if they don’t want anything at the moment, still tell them to save. Starting to save early can build up their emergency fund for if something happens to them in the future. They may even be able to put some of their savings towards a college fund. It is also never too early to start investing. The earlier they start investing, the more they will earn in the long run. If your children are under 18 then you may need to open a joint investment account with them.
If your child is tech savvy, you may want to introduce them to some mobile saving applications. One app is the GuacApp and can help your child save money for different items they want.
Manage Your Credit Cards
Credit cards can be a great tool. Not only do they earn rewards that can be used to travel, but they can also be used to build your credit. There is nothing better than giving your child the gift of perfect credit. This can be done by opening a credit card in your child’s name, using it for things, and then paying off the total balance. You may not want to wait too long to do this. Once your child gets out in the world, they may think a credit card is free money.
If you child abuses their credit card to begin with, and doesn’t pay off the balance each month, they are going to need to work to improve their credit score. This can take time. That being said, it all can be avoided if you teach them how to use credit cards to their advantage.
Credit cards can be a confusing topic, especially considering there are so many credit card companies offering different yet similar products. Teach your kids about money by talking to them about credit cards.
Create a Budget
Many adults struggle with creating and sticking to a budget. This is why budgeting is one of the things to teach your kids about money. This may be difficult to do because your child probably doesn’t have a ton of expenses to worry about. If this is the case, then have a discussion with them. Possibly include them in your budgeting process.
Inform them that Budgeting should start with outlining incoming and outgoing cash flows. Then teens can look at where they’re spending their money and how they can manage it better.
If your child knows how to create a budget before they live on their own, then they are already one step ahead. They will be able to determine how much money to spend on their housing, groceries, utilities, insurance, and more. Once they figure this out, they can then allocate funds to things they like. Some of these expenses include student loans, traveling, going out with friends, and other types of entertainment.
Teach Your Kids About Money Now!
It is rarely too early to teach your kids about money. Personal finances can be a huge cause of stress and anxiety. This is why you should start having discussions with your children about money early. Talk to them about how powerful saving money can be, and that even if they don’t need money for something now, they may in the future. Next, tell them how credit cards work and how they can be used to build their financial credit score. Lastly, inform them about budgeting and how it is a necessity in order to life a financially stress-free life.
