As a parent you must want to see your kids do well in every sphere of life. You as a parent should help your kids to build habits that will make their life easier when they get older. And that is true with finances as well. Helping your kids to build strong financial skills is one of the most important life lessons that can make a difference in their future. Moreover, considering the tales of financial pitfalls and extreme indebtedness plaguing many families in America, there is no better time to encourage our young ones to imbibe healthy money habits than now. The sooner parents get a hold of this and start taking advantage of their influence on their children’s financial decisions, the better for them. So, here are a few habits to build in your youngsters that will help them make smart financial decisions someday.
Saving Money In Piggy Banks
The primordial habit of teaching children to save money in piggy banks still holds sway today. Even more gratifying than piggy banks are transparent jars. A clear jar allows the kids to appreciate how wealth builds up when a portion of it is kept aside. Talk it through with them and encourage them to reserve about a third of their weekly take for savings. As they accumulate more significant savings over time, appreciate their effort and achievement.
Kids should learn to spend just the right amount from an early age. You as a parent should teach your kids to spend for the items they need. You should even teach help them understand the value they get by spending certain amount of money. Paying the right amount for a product comes with a sound understanding of what the product or service actually worth. You can even encourage them to keep an account of their daily spending without losing a cent in their report. Make it fun for them and not like a strict boring routine. In fact, there are many Smartphone apps that make this activity fun for the kids. Employ them in achieving this task. These records should be accumulated over months and finally reviewed together to identify spending patterns. Once you do, have a healthy discussion about the direction of spending. Help them to identify the unhealthy characteristics while praising them for the positives, no matter how little.
Learning to accumulate wealth is not all there is to life. A more rounded financial development will encourage giving and sharing with the less privileged. To balance the receiving with some giving, you should set examples by giving less privileged people from time to time in front of them.
Even encourage your kids to buy clothes and other items from their savings and give them out to local charities or the homeless people on street. In the end, they will learn to understand that everything, from money to time and energy, can be given for a greater cause.
Practicing Delayed Gratification
It is more difficult today than ever before to bring up young ones who can resist the temptation of small gains for the benefits of larger future benefits. Kids are very popular for their antics when they don’t get the things they want. They throw tantrums that guilt parents into buying unnecessary things to satisfy their immediate pleasures. Unfortunately, if not curbed early, this behaviour transcends into something worse in the future – kids grow up into impulse buyers. A simple way to imbibe the culture of delayed gratification is to apply the marshmallow principle. The lesson is simple: one treat right now or two treats later.
Smart Use of Credit Cards
You can introduce credit cards to your young kids as soon as you feel they are ready to use it. While credit cards come with the danger of over-using, smart use of it can make life easier for anybody. You should teach your kids to live a near cashless life for a safer and more convenient life. They can borrow money without any interest if they can learn to pay off the amount within the given time frame.
Starting Long-Term Projects
Growing up, some of us couldn’t join the other kids to partake in those little pleasures like visiting the cinemas every weekend. Still, once a month was possible because I would set aside a little sum from my daily allowance and accumulate enough to see a movie per month. Looking back, there’s no greater motivation than a spellbinding vision of the future to guide spending and saving. Push your wards to set money aside for specific items or long-term dreams. The goal could be as ephemeral as purchasing a toy to life dependent choices like saving for college. So, you as a parent should give your kids money for all kinds of things and they will save from those and do something big out of those savings in future.
Earning Rewards For Work
Don’t pay your kids for breathing. Instead, reward them for work and problems solved. Teenagers, in particular, have a lot of free time that can be put into earning money from a job. Many states have provisions on the ground that allows teens to work during vacations – spring break, summer break, winter break, fall break. Earning cash will give your wards a grasp of how adults get by every day and how much work must be done before one can pay for the things they want. This way, kids grow up to cherish every penny earned.
Learning To Invest
Without doubts, learning about investment can be tricky for children, but it eventually pays off if they are made to learn the basics. While many kids can easily pick up the concept of saving, investment is the next step in teaching them to make money work. It starts by teaching them the differences between savings and investments. Then, highlighting the risks and rewards of each. One great option, today, is for kids to buy individual stocks. BusyKid, for example, is an online tool and allowance platform that helps children invest money legally. Parents can equally take the fun route by introducing their kids to investment games like monopoly and the likes.
Shopping On A Budget
Involving kids in shopping and budgeting from the age of three has been shown to help them become financially savvy. Family shopping trips provide a great platform to introduce your kids to budgeting and spending. Not only should they watch you make important financial decisions, it is also important to involve them in the whole experience. Involve them while making the budget and let them take charge of the shopping list at the grocery store. This way, your kids will learn constructive money habits and how to pinpoint overpriced and inferior merchandise.