Make sure to always tell your kids the truth. If you’ve been acting anxious and on edge lately, they’ve noticed. Rather than let them wonder why Mom and Dad are working so much or constantly talking about money, explain to them what’s going on in the family’s financial world in terms they will understand. Explain to them how much things cost as well. Some parents are surprised to find out that their kids don’t have a very good grasp on what things cost. A great hands-on way to open their eyes is to take them on a “money tour” around the house. For example, kids might not understand that hot water costs more than cold water, or that bumping up the heat results in higher power bills. This exercise will teach them how they can conserve and thus help the family save money.
As kids grow up, allowances are a great teaching tool for handling money. You don’t have to break child labor laws to find great ways to help your kids earn their allowance rather than just have it handed over to them. A well-implemented allowance program can mimic many money matters that adults face every day throughout their lives. From recognizing the need to earn the green stuff to learning how to responsibly and intelligently spend, save, and invest their allowance, children can gain a solid financial footing from a young age.
Continue to teach them while going through your daily routine. Teaching them to shop wisely is very important. Family shopping trips, whether for groceries or something else, are likely to be your kids’ first encounter with spending. They’ll see you make decisions based on what the family needs, maybe see the occasional coupon used, and will observe how you pay. These trips are a great time to teach them lessons about money and the value of product research and comparison shopping.
Once your kids reach their teenage years, encourage them to get a job. An allowance doesn’t have to be the only way for your kids to earn money. Your child’s initial exposure to the work-for-pay world can start with something as simple as a lemonade stand. Depending on age, he or she might do yard work for neighbors or offer babysitting services. Earning your own money is one of the greatest ways to start implementing smart spending habits. No one likes to spend their own money, especially kids. Once they learn the value of a dollar, they will be sure to be smart when it comes to financial decisions. (References: HVParent.com)
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We are not financial advisors and therefor are not giving any financial advise. Before implementing any of the tips on this website, please consult with a financial planner to ensure it makes sense for your individual financial situation.