Creating and following a budget, saving, investing, and planning for the future are difficult topics and sometimes confusing for adults. It, therefore, can be very overwhelming to think about how to teach your children about complicated financial topics. So much so, that many people avoid talking to their kids about money which can lead to kids not being able to become financially independent adults or not knowing how live within their means. Instead of becoming overwhelmed by the amount of complicated financial topics, start small by focusing on the basics of money management and following these steps:
- Set a good example. Children are excellent observers and will model the behavior of their caregivers. If you are living within your means, budgeting, saving, etc., your kids will learn from your habits.
- Start early (or now, if your kids are older) and don’t rely on the schools to teach your kids about finances. Show your kids how to balance their checking account, the importance of saving, etc.
- Don’t pay your kids for regular chores. They won’t earn money for doing everyday tasks as adults. Instead, if you choose to give your kids an allowance or pay them, have your kids earn it by taking initiative and going above and beyond. For example, raking up all the leaves in the yard, helping with special tasks, etc.
- Show them the importance of saving. Help them set goals and encourage them to achieve those goals.
- As your kids grow, help them become financially independent. Have them be responsible for their cellphone costs, work to earn money to buy “wants”, etc.