How To Raise Financially Responsible Children
Do you wish you were given more tools to navigate today’s complicated world of finances? We can learn from our mistakes and pass on our knowledge to the next generation. Whether you believe it or not, teaching them young will help them succeed when they move out. So, help them grow by guiding them to fiscal responsibility.
1. Start Early
Introduce key concepts like saving and budgeting while they are young. Giving kids allowances and teaching them how to spend their money wisely is a great way for them to practice saving their money, even if it is for candy and toys. Saving money for a toy and understanding how much work goes into a purchase sets the foundation for them to make bigger financial decisions later down the road. Some ways to help your kid learn fiscal responsibility start with habits such as:
- Teach them budgeting – You can find fun, kid-focused budget sheets online that focus on money basics
- Set saving goals with them – What big item have they been begging for lately? You can take this opportunity to teach them how to save for the big purchase themselves
- Explain needs vs wants – Help your kids understand purchases that are needed like rich-in-nutrient food versus wants, like candy
- Provide an allowance – You get help with the chores around the house, plus they learn how far their dollars stretch and how much work goes into making and saving money
2. Lead By Example
As a parent, you are your child’s number one observer. Your children are always watching you even when you don’t realize it. Be mindful of the example you are exhibiting and demonstrate healthy habits, like sitting at your desk and updating a budget sheet. Another example is actively looking for cheaper options and sales while shopping. You can turn it into a game and ask your kids to look for the cheapest pasta sauce option. Whoever finds it first wins! By taking the initiative to be financially responsible, your kids will follow in your footsteps.
3. Encourage Experience
Allow your kids to engage in real-world experiences before they move out. This gives them the chance to live out what they have been taught and find room for improvement.
- For younger children, this may look like giving them an allowance and teaching them how to budget money.
- For older children, encourage them to get a job and manage their own income. As they make mistakes, be there to guide and teach them
Letting them handle their personal expenses will get them the real-world experiences they need and lead them to make better financial decisions in the future.
4. Involve Them In The Family Finances
Children find value in being included, so take advantage of this! Allow them to learn alongside you by sharing basic financial goals you have so they understand the decisions leading up to them. Include them in family meetings that go over savings goals and the work it will take to get to that point. For example, if you want to buy a family pet, encourage your children to look up different breeds that will mesh well with your lifestyle. Also, help them understand the responsibility and other items that need to be purchased before taking the next step. By breaking down the prerequisites of a purchase and asking for their ideas, they learn to think logically and look at the big picture.
Raising financially responsible kids is a vital part of parenting and plays a major role in the success of your child as they grow up. By starting at an early age, your kids will have the tools to make smart financial decisions in the future.