Thursday, February 22, 2018
7 Ways to Teach Your Children About Money
Everyone wants the best for their children. We all want the next generation to have a better life than we did and that includes not having to struggle with money. Having been there before, I know how hard it can be to live paycheque to paycheque. Making sure you keep a roof over your head, let alone raise your children right can seem almost impossible. There are ways to make sure they have the right mentality when it comes to money. No one likes a spoiled kid and what you are doing may be creating a little money monster. Today I am going to show you 7 ways that you can teach your children about money. They are easy and productive and will help you raise money conscious, respectable children. It’s never too late to get started, so take note of these methods.
1) Give money, not gifts
Now, this may sound a bit odd, but you should always give your children money and not gifts. When your children are young they will request the latest toy or new gadget. Instead of running out and buying it for them, take the amount and give it to them in cash. When they get the cash, tell them it is for the toy that they wanted, and you will go to the store and get it together. Go through the process of waiting in line, getting the toy off the shelf and buying it at the cashier. Also, make sure you show them cheaper toys and how they can get more for that money than just the one toy. Going through this process will help your child realize that toys don’t develop out of thin air, they must be bought. Now you might say this takes the fun out of gift giving. Not true. The gift will still be given, but the lesson will be worth much more. Far too many children think that wanting something should be enough to get it. Many of these children grow up into people who are unwilling to work hard to achieve their goals. This lesson aids in quashing that mentality.
2) Have them help you pay
Along those lines is allowing and requesting your children to help you pay when you are at the checkout lines. This can be at the grocery store, department store or at the local coffee shop. Having them help you pay further illustrates that everything in life must be bought and nothing is free. We cannot take for granted that we have food in our bellies when so many people in our own neighborhoods go without. Children should understand this and know that food and clothing cost money, of which some people do not have enough of. It will also help them with math and counting. You never know, you could be raising the next Warren Buffett by getting them to know the importance of money.
3) Pay them a salary, not an allowance
When you get older you understand the importance of a long day’s work. It isn’t easy working 12-hour days, and no one enjoys it. When you have children, it is important that they understand that all money must be worked for. They also need to know that you will be compensated based on how well you complete the job. Incomplete chores should not be rewarded. Just breathing should not require an allowance. If you have children your house should always be spotless, your lawn mowed, and your driveway shoveled. There is no excuse as you have workers living right there with you. Have them complete the chores with you and reward them for their efforts. No free rides.
Should you pay your children to do chores? – Financial Post
4) Glass jars and bank accounts
When your children are younger you should have them save their money in a glass jar, not a piggy bank. The point of savings is to watch it grow. This practice will get them excited about the accumulation of money. When they get older, get them a bank account. Teach them about interest and savings. Make sure that they put a portion of their money earned into the glass jar or the bank account. When they have enough saved up, help them buy a savings bond and show them how their money can work for them. A savings bond is a great tool as it forces your child to say goodbye to their money for a fixed period of time. When their money re-emerges, there is more of it than before. This teaches discipline, patience, and frugality. All lessons that will be needed later in life.
20 Ways to Teach Kids How to Save Money Responsibly at Any Age – Money Crashers
5) Teach them to give back
One of the most important lessons a child can be taught is the importance of giving back to the community. We walk by people every day going through hard times and we are very lucky to have the level of wealth that we do. It can be easy to forget about that when we are struggling to better our lives. While I strive for prosperity and financial freedom, others struggle to find a meal and warm place to sleep. Our children should know this. It is not about scaring them or setting them straight. It is about giving them the compassion needed to be a caring, empathetic human. With great wealth comes great responsibility and that starts with teaching our children to give back.
6) Help them job hunt
Looking for a job is a scary time, especially for young children. Help your child make their resume and search for a job. Teach them about employment and what it means to put in an honest day’s work. Teach them about hierarchy and how they might have to swallow their pride while working. Having them know what it takes to be a good employee is crucial to their success and it all starts with that first job hunt. Hit the pavement with them if you must. It can be a fun and exciting experience that should end with a nice dinner at the place of their choice. Oh, and by the way, make sure they dress nicely for the interview. There is an epidemic of young adults showing up to interviews in hoodies and ripped jeans.
10 High-Paying, In-Demand Careers for 2018 – Budget Boss
7) Teach them about debt and credit
I remember when I was 19 and headed off to university. I had 4 credit cards with a total limit if $3,000. It was completely unnecessary for me to have access to that much credit. All it did was get me into trouble. A simple way to teach your child about credit is to charge them interest for the things that they want. During the allowance stage, listen to their requests for a new toy or game. Propose to them that they can have it right now if they want, but you will have to take their allowance until it is paid off. Also, make sure they allowance timeline is far longer than the cost of the game. When they complain about how unfair it is, let them know that wanting things before you can afford them, comes at a cost. While they might still choose to get the game early, they will regret that decision later. There is a stark difference between young adults with and without debt. Those without have less stress and can strive for more at a younger age. Those with debt have only one goal, to get out of debt. Help your child be the former, not the latter.
Teaching your children about money may be the most important lesson you ever give them. It will guide them through life with a sense of empowerment, confidence, and intelligence that pay off immensely. Small little lessons when they are children will go a long way to accomplishing this. It will also help you from raising whiny brats who expect everything given to them. That alone is worth its weight in gold.
Thanks for tuning in today as we continue with Family Week at Budget Boss. Don’t forget to tune in tomorrow as I discuss several tools for proper family financial planning. If you would like help teaching your children about money, please do not hesitate to contact me at joe@budgetboss.ca. Have a great day Bosses!
“Education is the passport to the future, for tomorrow belongs to those who prepare for it today.” – Malcolm X
Email – joe@budgetboss.ca
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