As your children get older, they will need to learn how to be completely financially independent. Every young adult needs to be shown how to use money responsibly. If you aren’t proactive and teach your teens early, they could fall into bad habits. Most adults have a hard time spending carefully, saving, and investing, but with the right guidance your children can become a financially savvy and economically responsible adults. Since our schools don’t do a great job of teaching kids how to be independent with money, here are some methods that will help you get started early.
Include them in Financial Decisions
One of the best things you can do for your children in regards to money is to include them in your own financial decisions. This will show them that money doesn’t grow on trees, and that you need to make intelligent decisions with it. You can start this at a young age. Simply asking them what they would do, you can use their answers as an opportunity to show what good financial decision-making looks like.
Many parents are uncomfortable sharing these details with their kids, but it only helps them overall. Your teens will begin to understand that they can’t always have what they want, and if they save maybe they can get it. It’s actually quite simple. Including your teens in decisions concerning money will enable them to spend responsibly, borrow carefully, invest properly, and save intelligently.
Get them a Prepaid Debit Card
Giving your teen a card may not be the first thing you think of when you decide to start teaching them financial lessons, but there isn’t a better way. Teens learn from doing and making mistakes. With a prepaid debit card, they can learn how the world of finance works. According to the specialists at the site MoneyPug, which is used to find UK prepaid cards, they will be able withdraw cash, use the card online and in stores, but will not be able to overdraft or dip into your savings.
Prepaid debit cards are simply loaded with the funds you want to give them for allowance, school supplies, food, and more. This is a great way for young people to learn that if they spend their money, they won’t immediately have more to spend. It will teach them that they have to save for the things they want but pay for what they have to first. Prepaid debit cards are a great way for your teen to begin learning about money and making mistakes that will show them how to become a financially responsible adult.
Encourage Communication
When it comes to spending and saving with a partner, communication is everything. Encouraging financial communication with your child at a young age can help them in the long-run. Keeping the details of your finances from your partner or spouse is never a good idea, and communicating with your kids about money will show them that it is okay to talk about it and that you can do so productively.
Help them Automate their Finances
In this increasingly modern world, you can use other tools that are at your disposal. For example, help your teen automate their finances. This will help them visualize how they should be spending, and how they should be saving, especially if they gravitate towards graphs and numbers. Automaton services delegate specific funds for specific things, like bills and mandatory expenses first, then less important things. This will teach them to pay bills and debt first while determining an amount they should save every week or month. With the money that is left are automation, it’s simple. This will be their spending money for that particular amount of time.
Teach them About Credit & Debt
Credit is used for the wrong reasons. It leads to debt instead of favorable borrowing rates. If you start teaching your children about the world of credit and debt early, they will understand that they should avoid it and always pay money back immediately. You can even take them through borrowing money for college, and put them on a plan to pay the money back consistently, starting before they graduate.
Don’t avoid teaching your teens about money. The sooner you start, the more financially savvy your kids will be. Get started today by following these simple tips and methods. You will be on your way to fostering a financially responsible adult in no time.