One of the most valuable things we can teach our children is good personal finance habits. The way that our children learn to manage their money is going to play a vital role in their future.
Here are some fantastic finance tips for kids from Rusty Tweed:
Be A Great Role Model
Let’s face it, no matter what we try and actively teach our kids the most important thing they look at is how we do things ourselves.
It is important to take note of how we talk about money, how we earn, how we spend and how we save. If we make smart choices consistently our children will easily learn and implement the same good habits.
Start talking to your children about money and how it works from an early age. The sooner your children start understanding the concept of money the better.
Research shows that your child’s attitude towards money is already formed by the age of 7 and even at the young age of 5 your child will have an emotional response to money.
It is therefore essential that you start thinking about the role that you play in developing your child’s attitude towards money.
Encourage Wise Spending
Giving your child an allowance from an early age will help them to budget. Make sure they understand how much money they receive and how often they receive it so that they know how long the money must last them. I
If your child is young it is best to give an allowance on a weekly basis and when they get a bit older you can make it monthly and let your child learn how to make the money last each month.
Create A Habit Of Saving
Learning how to save is important and the earlier that you start the better. Explain to your child that toys and treats will be bought by you on birthdays and Christmas. If there is anything else that your child wants during the year he will need to buy it himself from his allowance.
Get your child a piggy bank and teach him to always put some money away every time he receives his allowance so that he can save up for something special that he wants.
Your child will appreciate the toys he buys and he will be learning a valuable lesson about saving.
Encourage Your Kids To Earn
As we well know, money does not grow on trees and there is no endless source of money that just comes out of an ATM. Make sure that your children understand this from as young an age as possible.
The best way to help your children to understand the true value of money is to encourage them to earn themselves. A great way to do this is to let your children do extra chores if they want to earn some income.
If they come up with ideas for making money such as baking cookies or having a garage sale encourage them and help them to get started. Encouraging your child’s entrepreneurial spirit will take them far in life.