Passing on Positive Money Habits to the Kids

5 tips for passing on postive money habits to kids

Raising children is an extremely rewarding experience, but it requires a great deal of patience and teaching. While many parents teach their kids the basics of life, many of them leave out financial lessons. If you want to make sure that your kids learn how to handle money appropriately when they become adults, you have to teach them about budgeting and financial responsibility at a young age. 

Passing on Positive Money Habits to the Kids

Here are a few strategies that you might want to try when it comes to teaching kids about positive financial habits:

1. Teach Kids About Money Early

While you may be inclined to not bother your kids about money when they are young, it’s generally a good idea to at least introduce them to it early on in life. When they are very young, just a basic introduction of what money is and how it works will suffice. When kids become familiar with money early on, they will be much more likely to understand more complex financial topics later on.

2. Teach Them About Goal Setting

Once your kids are a little older than just learning about what money is, start teaching them about the importance of goal setting. While this applies to every area of life, it is especially important in regards to finances. Show your kids that they need to have some kind of financial goals to shoot for or they will most likely end up being disappointed in some way. Show them how to think about what they really want financially and then write it down. Written goals typically have higher success rates than those that are not specified in some way.

3. Give Them an Allowance

Perhaps one of the best ways to teach kids about money is to give them an allowance. They should have to do something around the house in order to earn their allowance, but you should give them something on a weekly basis. This way, they’ll have some money that they can use as they see fit. This will teach them early on that if they blow it all at the candy store one day, they won’t have any left over to buy things with the next day. Their allowance should also increase over time so that they can earn more as they get older.

4. Show Them How to Save Money

Showing a kid how to earn money is one thing, but showing them how to save it is another. If you can develop a certain level of frugality in your children, they’ll most likely understand how to save more money over time. Show them how to look for coupons and how to redeem them.

Teach them how to find coupon codes for Nordstrom (or any other store) online and then how to redeem them in the online store. Show kids how to join a shopper’s club at the grocery store and save money on all of your purchases. Teach them about the weekly specials at the super market and any other tricks that you know about saving money. With this information, they’ll be much smarter shoppers when they use their own money in the future.

5. Open an Account

When you feel that they are old enough to handle it, consider opening some type of a savings account for them. You might even want to get them a Roth IRA if they are interested in saving for the long-term. This way, they can learn the power of compound interest as well.

With these strategies in mind, your kids will be much more knowledgeable about financial matters when they get older. You’ll be able to help them in a big way with these simple lessons.