Money does not grow on trees… Sometimes our kids tend to forget this. Raising money-savvy kids in a time where instant gratification is at its height is a huge challenge. With all the latest technology, fast foods and clothing constantly shoved in our faces through advertisements, it’s difficult to spend money wisely. We need to make sure we’re constantly encouraging our kids to have a healthy relationship with money so that they are confident about managing their finances in the future.
Here’s how you can raise money-savvy kids:
Set a positive example
Show your kids that you are committed to planning, budgeting and saving. Your kids don’t only pay attention to what you say but what you do too. They become more and more like their parents as they grow up so it’s important to be the best role model you can be for them. Live a money-savvy life and your kids will follow in your footsteps. This includes saving, spending wisely and not spending money you don’t have.
Speak to them about money
For your kids to develop a healthy relationship with money, you need to teach them all about money, starting with where it comes from and how it works. They need to understand that money is a serious topic, but they must not feel as though it is intimidating or “too grown up” for them.
Make sure you have money-related conversations and share practical money advice and tips with them to prepare them for a successful future.
Involve them in budgeting
To help your kids learn more about finances, let them see how you create a family budget. The process will teach them a lot about money management and how expensive paying for things really is. You don’t have to dive into too much detail with them – just teach them the basics. Learning the basics of budgeting is important for developing their thought process towards spending and saving money.
Give them some pocket money every money to develop a sense of responsibility when it comes to managing money. Let them draw up their own budget – they can plan what they want to spend their money on and how much they want to save towards something they really want. You can even open online savings accounts for your kids. This way you can show them how to track their savings. Saving up and paying for something they really want will steer them away from the instant gratification mindset that many adults have today.
Let them make decisions
Let your kids decide how they want to spend their money. Let them choose what they spend their money on. If they end up regretting their decision, they will learn how to save and spend their money more wisely in the future.
You can also teach them a thing or two by taking them to go grocery shopping with you. Show them how to compare the prices, quality and quantity of items, while teaching them how to keep within a budget.
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