Budgeting and money probably isn’t something that your children get excited about. However, with many adults struggling with debt and other financial problems at this very moment, it’s never too early to start introducing them to the concepts.
When you’re young it’s easier for you to pick up new habits, learn new things, and develop a new sense of character. That’s why it’s important to teach your children when they’re young about being financially responsible. You don’t want them to make the same mistakes you or others have made with money.
Knowledge is Power
You don’t need to get into the fine details of interest, credit, and other financial verbiage right away. However, when your child has a sense of financial independence and stability at a young age, it will only help them in the long run. Especially when they grow into their teenage years and need to start thinking about a job, college, and transportation.
Both Scholastic and Wells Fargo offer free lesson plans and worksheets for you and your young ones to start working with. Additionally, while both guides are geared to a classroom setting, you can still incorporate these money skills into the home.
Plus, with summer break not too far away, there’s nothing better than reinforcing math skills while school is out!
A Penny Earned is a Penny Saved
Make sure that your child understands the value of earning their dollars. Make it clear how they will earn their money, don’t just give it to them because they want the newest toy or some candy. Have them set up a lemonade stand in the neighborhood, give them 10 dollars for getting good grades, or give them a dollar for washing the dishes. Whatever it is, make the amount clear and concise. That way your child knows what to aim for and what to do.
Additionally, if they’re old enough they can pick up small jobs for friends or neighbors, like baby or pet sitting.
Reward them for Saving
Give your child a goal to meet weekly or monthly. If they exceeded their goal, give them a gift card to their favorite toy store. A gift card can also help them understand their money even more because when they can’t use more than what’s on the card, unless they use their own.
Additionally, banks such as, the Workers’ Federal Credit Union here in town offer Worker Bee Accounts for children. The bank will match the first 5 dollars your child puts into their savings account and will receive a prize for each 100 dollars they save. Children are more motivated to do something when they’re rewarded for their behavior.
Tough Love Consequences
As an adult if you damage something (accidentally or on purpose), you have to pay for it. So, why not implement the same lesson? All children have bad days, but if they break a sibling’s toy or damage their own belongings, buy a new one, but have them pay you back over a period of time. Or have them make up for it by doing extra chores or tasks.
Monkey See, Monkey Do
Children often mimic what they see and if they’re curious to see what you’re writing in your checkbook or the coupons you’re clipping, show them. Explain why you have to do it and what it’s for. Bills are due and maybe you found some savings on the items your family enjoys at the grocery store. When your child sees you being responsible and frugal with their money, they’ll want to do the same.
So, besides encouraging your children to be financially responsible be the role model you’d like them to be at your age. We all make mistakes, but that doesn’t mean we can’t learn from them and use them to motivate others to understand where our cash goes. Teach your child now the true meaning of a dollar and it’ll pave their path for a brighter future. Do you have any strategies you use to teach your child about money? If so, leave your ideas in the comments below!