As a parent, you can instill in your children a deep understanding of money and the knowledge of how to handle their own finances to help them later on in life. And although you may think that this isn’t a lesson your child needs to learn until they can have a job, smart financial principles can and should be demonstrated at a young age to give your child the best chance at having a healthy relationship with money. To learn what you can do to start a lifelong habit of good financial decisions, Columbia Bank New Jersey has three tips for teaching your kids the importance of money and savings.
Teaching About Money Based On Age
Just as with any other concept, the easiest way to teach your children about money is to introduce principles line upon line as they grow and mature. Anna Attkisson, a contributor for Parents.com, shares that children can easily develop financial skills at any age if they’re taught correct principles through fun and interactive exercises. For example, toddlers can identify which coins are pennies and which coins are quarters while children aged nine through 12 can be taught how to compare prices of items in stores in order to get the best deal. By starting this at a young age, you are creating a solid financial foundation for your child to build upon.
Teaching About Frugality
The value of money can often be difficult for children to understand, especially when their desires so heavily outweigh any logical thinking regarding frugality. However, it’s in situations like this that Trent Hamm of TheSimpleDollar.com claims that children can learn the most about being frugal with their money.
Hamm suggests that before your child spends his or her money, talk to them about how much the experience of using that item should be worth to them and about how to shop around to find the best price. This will help them to think more about the value of money and what it takes to make money. It could also be beneficial to speak to your children about large purchases you make, like cars and homes, to help them understand principles of frugality in this space as well.
Teaching About Saving Money
With the amount of credit available for young adults, it can seem like a dream come true to be able to make purchases and then pay them off later. However, this can prove to be a major problem that many young adults are currently facing once they have to handle their pile of credit card debt. Getting trapped in this habit can be severely detrimental to financial health for years after these purchases are made. To prevent this from happening to your kids, Protective.com recommends for parents to teach their children how to save money by helping them to set long-term financial goals, opening a savings account for them, and teaching them how to overcome the mindset of instant gratification.
Teaching your children these simple yet important principles about saving money can result in major benefits for them later on in life. They can learn that saving for a large purchase is going to be the best decision in the long run. It can also help them to feel more financially secure knowing they have a safety net to fall back on if needed.
Money management is a skill that your children will thank you for instilling in them when they become adults. The confidence that can be gained through financial security is something that will prove to be invaluable to your kids. To make this endeavor easier on you as a parent, use the tips mentioned above to show your kids the importance of learning about money and saving money.