Most parents want to ensure their kids have happy childhoods. This is understandable. Providing children with pleasant experiences during their early years of life is a key responsibility of being a parent.
That said, it’s also important to remember that parents need to help their kids prepare for adulthood as well. For example, a child is much less likely to face money woes later in life if their parents help them learn about personal finance.
There are a number of ways you can help your kids develop positive money management skills. The following are a few noteworthy examples to keep in mind:
Give an Allowance (in an Innovative Way)
In theory, giving a child an allowance can teach them about the value of earning money and spending (or, more ideally, saving) it wisely.
However, there are innovative approaches to giving an allowance – like debit cards for kids. These use apps that can be logged into by both parents and kids.
The apps allow parents to set chores and fund their kids’ accounts when chores have been completed. Through the app, parents can also check how their children are spending their money, set spending limits, and more.
This gives parents the opportunity to exercise a greater degree of control over how their children earn and use their allowances. Thus, it helps them more effectively teach their children important lessons about personal finance.
Explain the Reason You Have Money
This is a tip parents of very young children may want to consider applying. Quite simply, very young kids often don’t realize that money isn’t something Mommy and Daddy have for no reason. They don’t understand that the money their parents have exists because they earned it through work.
It’s important to explain this idea to children early. According to financial experts, this is in fact one of the most critical steps a parent can take when helping their kids appreciate the value of earning and saving money.
Set a Good Example
Research consistently shows that children learn from their parents’ behaviors. They see their parents behaving in a certain manner, and they learn to copy them. This applies to many areas of life.
Money management is just one example. To optimize your chances of raising kids who make smart financial decisions, you need to do so yourself.
More importantly, you need to do so in a way that’s visible to kids. For instance, if you’re making smart decisions by paying off your credit card balances every month, while that’s certainly not a bad habit, it’s one your kids might not be aware of. Depending on their ages, they might not even understand the full relevance.
Instead, parents can set positive examples in more obvious ways, such as avoiding impulse purchases. That can sometimes mean saying no to a child when you don’t want to. Yes, maybe you would love to buy every toy your kid asks for when you’re out shopping, but if you do so, you’ll show your child that it’s okay to spend money whenever you want something. In the long run, that lesson will hurt them.
The main point to remember is that paving the way for your kids’ successful futures is one of your main duties as a parent. This, to a degree, can involve making sure they learn about the best ways to manage their money at an early age.
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