How To Raise Financially Responsible Children
As adults we struggle with financial responsibility, but what if we started learning the ins and outs of finances early on? What difference could it really make? Instilling in our young ones the importance of budgeting, saving, and the true costs of everyday purchases will help give them the tools they need to live a financially stable life when they grow up. But how do we do that without overwhelming and stressing them out? Don’t worry, we have the answers.
Teach Them The Value Of A Single Dollar
It can be hard for children to understand large amounts of money, so let’s start small. Teaching kids the value of a single dollar will help them get a better understanding of what things actually cost. Give them options while at the store; you can get 1 large toy, or 2 smaller toys for the same price and they will most likely start to learn the basics.
Give Them A Small Allowance
Some parents choose to use the “Spend, Save, Give” model to teach their children simple and positive budgeting habits. Parents (and children too!) will create 3 jars where kids can put in their weekly allowance. The “spend” jar is used for impulse purchases such as treats and smaller toys, while the “save” jar can be used on larger purchases such as expensive toys or even trips to Disneyland. The “give” jar is just as important as it teaches the value of giving back to either a charity or someone they know in need.
Take Them To The Bank
When the time has come for your children to get their very own debit card, take them to the bank. Help them open their own banking account where they can learn to manage their own finances on a daily basis. While checking accounts are great for teaching them how to budget, opening their own savings account is also an amazing tool. Some parents will actually match whatever their kids decide to put away in their savings which can make them more inclined to save.
Show Them How YOU Budget Each Month
Now we aren’t saying that you need to put the burden of family’s finances on your young ones, but it's a good idea to show them how you choose to budget in simple situations. Bring your kids with you to the market and tell them that you have $200 to spend. Have them help you pick out household items such as toilet paper, milk and food and have them assist you in making the right decision on which products you end up buying. If you spend more than you budget, have them choose something to put back. If you end up spending less, you can explain that there are now leftovers that can be spent (or saved) elsewhere.
Don’t Give Value To Materialistic Things, Glamorize The Simple Things
While we all enjoy our materialistic things every once in a while, it is good to teach your kids the value of life experiences. Instead of planning an expensive family trip, take your kids out in nature and have a simple (and undoubtedly fun!) vacation that will cost you way less in the long run.
Don’t Be Afraid To Say No!
Saying “no” to our kids is one of the hardest things because we want to make them happy. With that being said, if they get everything that they want, they will grow up thinking that is how the world works. It is important to give our children boundaries and explain why we don’t always get everything we want.
While even as adults we can struggle with our finances, it is never too early to start learning the right way to save and budget. By working with children at a young age, it is easier to instill positive spending habits for later on. If you are struggling financially, Madison Monroe & Associates is here to help. Reach out to us today and one of our staff members will gladly work with you to get you back on the path to financial freedom.
Email us today at Help@MadisonandMonroe.com