How to Raise Financially Savvy Kids

Teaching your children to deal with money correctly is really important. It doesn’t matter how old your children are, they can learn important financial lessons at any age.

5-Minute Crafts shares simple but effective ways to teach children of any age good financial habits to help them become successful.

Why it’s important

Self-discipline is one of the most important factors of success. Being able to refuse a quick gain for something bigger in the future is a gift you will definitely need in your life.

A person’s relationship with money is daily and lifelong, therefore it is crucial to life success, security, and freedom to master it,said Sam X Renick, a financial educator who created the Sammy Rabbit storybooks and financial literacy program to teach young children about money.

Start in early childhood

Start from the age of 3 or 4. Explain to your children what money is, what it’s used for, and what it looks like. Take your child to a store and show them how you pay for something, that everything has its price, and tell them how long it takes you to earn this money. Show them the receipt and tell them how much everything costs.

Don’t buy what your child is asking for right away

Don’t indulge your children’s wishes or wants but tell them that you will talk about it later at home. When you get home, make a list of the things your child wants together.

Draw pictures of all the things the child wants, write down the names and prices, and at the end of each month, let the child choose one thing from the list. This way, you will teach your children to be more careful about the things they buy and not fall for an impulse to buy something they don’t really need.

Create opportunities to earn money but don’t pay your children for grades

First, ask them if they want to earn their own money and what they are ready to do for it. You can give them money regularly, increasing the amount depending on age instead of giving them money for something specific. This behavior will help them plan their expenses and think about the consequences. If the money is not enough, you can always agree on ways your children can earn more.

Ways for young school students to earn:

1. Create holiday cards to sell.
2. Choose some useless toys to sell.

Ways for high school students to earn:
1. Walking someone’s dogs.
2. Washing cars.
3. Fixing things and selling them online.
Always watch what your children do so you can guide them and give them advice.

But don’t pay them for their grades! Paying them for their grades might lead to really high expectations: if you pay to them once, you will make the child think that every future grade will be paid for.

Make a family budget

budget is a family financial plan based on your income and expenses. When we make it with our children, we help them: set realistic goals, understand what it means to live within our means, and be responsible about money at any age.

You can tell younger children about the expenses you have for your car, apartment, clothes, and other things. If you have older children, you can give them more details about your family budget, the priorities you set, and how you save money.

Tell them about saving money

Saving teaches discipline and delayed gratification,Renick says. “Saving teaches goal-setting and planning. Saving stresses being prepared. Saving builds security and independence.

It’s important to explain to children that money is not just for spending. Tell them that saving is a healthy habit.

For example, your child has a lot of clothes but complains that he or she can’t afford new expensive sneakers. Help them make a savings plan for several months to help them analyze their expenses and find the mistakes they make. Show them a specific way, like for example, make 2 envelopes. Put some money for current expenses in one of them, and for bigger purchases — in the other one.

When your child is old enough, you can tell them about debit cards and bank saving accounts.

Share This Article