As parents, we want the best for our children. Help set your children up for a successful financial future by taking the time and to teach them money management skills from a young age. A study by the University of Cambridge found that money habits in children are formed by the time they are 7 years old. Don’t worry if your children are older though; we still have some great tips for talking to your children at any age.
Pre-school and Kindergarten
Set the example. Young children follow their parent’s cues. They will observe your spending habits, and any stress money may cause you. Work to set a healthy example by showing them how you handle your finances. This will hopefully help them follow suit when they get older.
Show them that things cost money. Instead of just telling your child that something costs $5, and they should save their money, help them collect the money for it from their piggy bank. Then have them go to the store and pay for it themselves. Seeing the money leave their hands will have more of an impact than any lecture on money.
Elementary and Middle School
Give commissions, not allowances. Teach your children that they have to work to earn their money; it is not something that is just given to them. Allow them to earn money for completing different chores, or getting good grades in school
Teach decision making skills. Allow your children to weigh decisions of buying one item that will prevent them from getting something else they may want.
Avoid impulse buys. Instead of buying things for your children they ask for (outside of necessities), give them the option to purchase it with the money they have earned. Encourage them to think at least a day before making the purchase so they can evaluate if it is an item that they need.
Give them the responsibility of a bank account. While they are under the age of 18, you will have to be on the account with them. This will allow them some freedom, while still allowing you to monitor their spending.
Set up a savings for their college education. Encourage your child to start saving money they earn for this future expense. Saving for today will allow them a better future tomorrow, and they’ll avoid needing as many student loans.
Teach them to be happy with what they have. Stress the importance of not comparing what they don’t have to others, and to appreciate and enjoy the things they do have.
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