Since personal finance isn’t taught in school, most of us learn money habits from our parents. If our parents were bad with money, chances are we will be bad as well. If you are a parent, you can teach your child good money habits, regardless of your financial situation. Here are four ways you can help your children develop a healthy money relationship by teaching kids about money.
4 Strategies For Teaching Kids About Money
#1. Include Them
When you are sitting down to pay your bills or balance your accounts, don’t keep it all a secret from your kids. This is a great opportunity for teaching kids about money. Be open about things. Explain to them what a credit card is, how it is beneficial and how it can be a bad thing if not used wisely.
Don’t worry about giving too much information. Kids are smarter than we think and if they don’t understand it, they will simply move onto another topic and come back to that one when ready.
By including them, they will pick up and learn many things that you aren’t even teaching them. Don’t be surprised if they ask you questions about the family budget that you don’t remember talking to them about.
#2. Be Positive
While being open about your money situation is good, be careful to always remain positive. Never associate negativity with money. The classic example of this is sighing or complaining when you get a bill in the mail. If you do this, your kids will associate money with negativity.
Likewise, never talk about how you cannot afford something. Even if you cannot afford it, find a way to put it in a positive light by saying “it’s not a priority right now.” You could even take it a step further and show them that if you want to buy something not in the budget, you would have to limit spending in another budget category, or ask them for ways to increase income so that you would have the money for the item in question.
By remaining positive about money, you provide them a healthy relationship with it. And part of a healthy relationship is treating things with respect and using it for the greater good.
#3. Learn To Earn
It’s important that your kids learn that you earn money through work. Personally, I don’t think giving an allowance for the sake of it is a good thing. It teaches kids that they will get money just because. It also doesn’t allow them to value it.
Growing up, I had chores tied to my allowance. More chores meant more money. Now that I am grown, I look at my friends who were given an allowance and see that they aren’t great with money while those that had an allowance tied to chores are good with money. I’m not saying doing chores is the only reason for this, but it is an interesting observation.
If you want ideas for getting your kids to earn some money, here is a great list I put together of close to 50 ideas for kids to make money.
#4. Learn To Budget
As your kids get older, you can teach them the importance of budgeting. Allow them to use the car, but require them to pay for gas. This shows them that in order to drive, they have to pay for gas.
You could even have them pay for some maintenance and/or insurance for the car as well. The sooner you show them that life isn’t all about income, that there are expenses that you have to pay, the better they will be with their money.
Having your kids grow up and avoiding many costly money mistakes means that as parents we need to take personal responsibility and teach it to them. If left uneducated, mistakes are going to happen and we don’t want to see our children’s future be limited by a lack of financial education.
Teaching kids about money is an investment that will pay off for the rest of their lives. So don’t be embarrassed about money. Take the time to educate your kids about money so that they can have a greater chance of having good money skills and little stress about money.