With regards to teaching your kids about money, the sooner you start, the better. Too often, parents postpone financial education until their children are over the age of 18. By this time, some young adults have already developed terrible money and credit habits.
Rather than delay money talk until the late teens and early 20s, make an effort to teach lessons about money when your kids are young, perhaps grade school. If they get into a routine of budgeting at an early age, they’ll have an easier time managing their cash as an adult.
1. Clip coupons. Don’t view coupons as a hassle. Frequently browse the newspaper or online to check for ways to save on everyday items, such as clothes, food and hygiene products. Teach your kids techniques to find coupons. For example, they might sign up for an email club and have coupons delivered to their inbox. Does your family like buying clothes that are on the premium side?
2. Give your kids an allowance. Rather than hand out money whenever they ask, start giving your kids an allowance each week. Assign them chores around the house, and if the chores are completed to satisfaction, give them a few dollars at the end of each week. Get kids into a habit of saving and being generous. Encourage them to save some of their money each week, as well as donate a small amount to charity.
3. Don’t overspend. If you’re able to live within a budget, your kids are likely to do the same. Set the example and practice what you preach. You might stress the importance of budgeting your finances, but if you do the opposite, your lessons will be pointless.
4. Allow kids to participate in shopping. Bring your kids along when grocery shopping. Some kids can’t grasp the idea of living within a budget. Before heading out, explain that you’re only going to spend a certain amount. As you put items into your grocery cart, have your kid keep a running tally on a calculator. Once you’re near your budget, don’t place any additional items in the cart. By this lesson, kids learn how to be selective when shopping, and how to avoid overspending.
5. Think of creative ways to save. A sale or clearance aren’t the only ways to save. Teach your kids creative saving techniques. For example, prior to buying that Ralph Lauren shirt you have always wanted, you might search for Ralph Lauren promo codes and other discounts. And before buying an item in the store, you might check an online auction site to see if you can find the item cheaper. There are plenty of tools to teach your kids on how to keep track of their finances. Just remember to have your kids start at a young age, get creative and explore ways to make financial education fun.