Whether or not you were raised with a solid education in finance and economics, one thing is for sure, you probably want to raise your kids with some understanding of money management. Here are just a few simple lessons parents can teach their kids – whether children or teens – about money before financial independence is reached.
- Work hard for your money.It’s important to teach your kids that money is earned, not simply deserved.To be willing to work for what you want, whether it be doing chores to earn their allowance, or getting a part-time job for some spending money once they’re of age, this is a valuable lesson to teach while they’re still young.
- Pay yourself first.When your kids do start to earn money, you should instill in them the importance of saving some of their hard-earned money before spending it all. From a piggy bankon their dresser to their first savings account, children who learn the importance of saving are already at an advantage above their quick-spending counterparts.
- Don’t spend more than you make.Another financial lesson that will benefit your kids is to teach them to always live within their means. Simply stated, that means that they should never spend more than they earn. Taught young, this lesson may help your teens and young adult children avoid accruing debt that they can’t easily repay.
- Understand what you need vs. what you want.Help your kids determine how to prioritize their spending so they start out their adult life on the right foot. Do they understand what a need versus a want is? The goal is to help teach young kids to eventually be independent adults that will be able to pay their auto loan payment and rent before buying a new outfit or expensive meal out. They will also learn that while they may want a brand new car, they may only be able to afford a used car instead. Used auto loans are available to help them with affordable financing when they’re ready to buy.
- Be generous. To help your children become good citizens, neighbors and friends, help them practice generosity. Although not all generosity comes in the form of monetary donations, one way to help your kids be generous with what they have is to start helping them donate to local charities when they’re young. Whether it’s giving away clothes they’ve outgrown and toys they no longer play with, or donating part of their allowance every month, raising kids who are kind, considerate and take joy in sharing what they’ve been blessed with will go a long way.
Generosity can also come in the form of donating large items that you no longer use. For example, you can donate your boat for charity, which will show your children that even your most prized possessions are worth giving up sometimes. When you donate a boat, the money from its sale goes towards children’s charities, which ensures that these kids have opportunities that they otherwise would not. By showing leadership in this situation, you can teach your children about the value of helping others. Hopefully, these lessons will stay with them throughout their lifetime and they will eventually turn into generous adults.
Give your kids the economic education you may never have had with the help of these simple and straightforward financial lessons. From working hard to saving money and giving some away, your children will never forget the money management tips you teach them, and the ones you show them with how you live. So set the example with lessons that create financial students for life.