Three Ways to Teach Your Kids the Value of Money
With the ever increasing availability of credit facilities such as student loans, personal loans, and credit cards, it is quickly becoming ‘the norm’ for adults to have debt. What many parents are not aware of, however, is that this mentality is something their children are noticing and will inherit. Below are three great ways to help you teach your child how to spend their money wisely now, and as they grow.
Lead by Example
Despite what your children will tell you, they don’t know everything about everything and learn most of their lessons from observing you. How you manage your family’s finances are no different. As you sit down to plan for the month ahead using your household budget, invite your children to join you so that you can educate them on how you balance your incoming and outgoing finances.
Show Them How to Save
Linked to the tip above, in addition to teaching the basics, show them the ways in which you stretch your dollar. Teach them about the power of catalogs and sales, show them sites such as the Groupon Coupons page for stores like Macys where they can save on luxury items, and help them to understand the benefits of planning months in advance to take advantage of bulk discounts. Each of these lessons are powerful and will help your children once they manage finances of their own.
Forewarned Is Forearmed
There are going to be times when your child, as an adult, is going to consider applying for a credit card or a loan. Instead of simply telling them that credit is the enemy, educate them on how credit works. Show them your credit card statements and explain how interest is calculated and charged along with information about fees. If you still have the product disclosure statement you received with your credit card, provide it to them as a learning tool. If they can gain a better understanding of how credit works at a young age, this knowledge can be used to make sure that, should they choose to use the facility as an adult, they use it wisely.
It’s never too young for your children to learn about finances, and the above lessons are powerful ones which can benefit them in their adult life.