Kids these days are knowledgeable about fast-growing technology. Often, they are more aware of the latest trends than their parents. But being up to date with the digital world is not enough. Children still need to learn practical matters, especially the financial aspect.
As parents, we must be their guide to properly handling the finances. Make sure to take note of these tips on how to raise money-smart kids.
Educate your kids
Kids need to learn all about money at a young age. It is necessary to emphasize that not all cash goes into the big-spending pot. Encourage them to use three mason jars to divide their funds.
One will be for saving, while the others are for spending and donating.
Every time your child will receive a cash gift or money from doing house chores, instruct them to divide it equally among the labeled jars.
These small steps will help them understand how to manage money.
Also, it highlights the value of giving back.
Involve trusted banks
Most banks advertise a savings account for children. It starts with low minimum deposits so that it won’t hurt your budget.
Also, kids with early access to savings accounts tend to accumulate more assets than those who don’t have one.
Plus, it becomes their stepping stone when they think of any investment in the future.
Furthermore, seeing how their savings accounts grow educates your child on how money can earn interest.
If they show interest in generating it more, it means you are on the right path of raising money-smart kids.
Check over the stock market.
Aside from reputable banks, the stock market is another aspect of expanding your child’s funds. Explain to them that investing money is like making a tree grow.
Although it takes time, it aims to meet the long-term financial goal.
But don’t forget to explain the ups and downs of the market.
Even though there’s a chance of making a fortune with stock investment, the risk is still there. After all, gaining and losing money is part of the investment risk.
Tag kids along with the shopping
Another financial lesson for children is bringing them on the next trip to the supermarket. Again, let the kids participate in grown-up activities.
It helps them become more responsible about the adult tasks and their money.
In the grocery, give them a calculator to track all the purchases they made along the way. Or you may ask them to pay the cashier in a coffee shop or bakery.
These small jobs teach them the costs of needs. So, start early in building the financial concept until they become smart-money kids.
Empower money for management experience
Often, kids have little moments to make financial decisions. That’s why it matters to them every time parents give them a chance to choose their wants and needs.
So, avoid stashing all the money on the shelf. Instead, ask your children what they prefer to do with their young earnings.
Allot a budget for them. Inform the kids to use it to celebrate a birthday, holiday, or major milestone. Let kids choose which account they want to contribute and donate.
Allow them to grasp the significance of saving and charity. Nevertheless, don’t leave them alone.
Your guidance as a parent plays a huge impact on their journey for being smart-money kids.
Begin to generate income
Proper education and management experience truly make a kid wise with money. But still, parents need to broaden their activity in generating income.
So, instruct them on all the possible opportunities to take them to the next level.
Teach kids to save and earn. Create an age-appropriate list of chores. Identify the amount your child will receive for every chore type.
Then, allow the kid to decide which tasks they want to do. Finally, make a chart that shows how much money they saved over the set period.
Remember, this is no child labor.
Instead, it motivates kids to do household chores. Plus, they get to understand the essence and benefits of work.
Build up a credit score
Being financially literate makes your child smart with money.
So, while they still live under your roof, assist them in building their credit score. Establishing a credit at a young age helps them get low-interest rates.
Also, it’s a plus when they look for employment.
Get your child a store credit card. It is convenient for teens to handle yet more complicated to mismanage. But learning credit card management skills will come in handy in the future.
It might be a small step, but it will truly set them apart from others.
Do not forget to teach them about responsible borrowing as well.
Let them see their progress.
Visualization helps children a lot in seeing their goals.
So, make sure the kids have a clear idea of finding and interpreting their finances. It serves as a great motivation to stay on the right track.
Also, it keeps them from straying away from the main objective.
Create a saving process visual. For example, put money in a transparent jar.
Often, people forget that pennies turn into dollars. But, then, dollars become hundreds of dollars.
Seeing how their savings grow in time fights the urge to spend money. Thus, turning them into smart-money kids.
Allow kids to make mistakes.
Giving allowance for children helps them manage their finances.
Along the way, wrong choices are inevitable. Let them experience the negative consequences of their decisions.
It helps them learn and understand more about money.
Take time to sit down with your kids.
Advise them on some techniques to set up a brighter financial future.
Also, share the financial lessons you learned when you were their age.
Being educated helps them avoid some mistakes. So, you’ll be able to raise money-smart kids.
Be an example
Most importantly, practice what you preach. Lead by example to your children.
Parents have a great deal of influence, as the youngsters tend to mimic their actions.
So, instill good money habits.
Limit activities that correspond to spending more. Instead of a shopping spree, use coupons at the grocery store.
Compare similar products and identify the cost factors before buying.
Also, purchase something special because you saved for it.
Raising money-smart kids is a lot easier with this quick guide.
Apply it with your children, and they’ll certainly appreciate it and use it for their future finances.