Though financial hardships are an inevitable part of adulthood, many issues can be prevented early on. When it comes to financial success, the earlier you start, the better. Teaching your children valuable lessons about money will prepare them for future triumph. Not sure where to start? Begin by proactively practicing these tips:
- Encourage Money-Making Opportunities: Spark your children’s interest by offering small chores for a reward. Feasible household tasks will teach your children the importance of hard work. Mowing the lawn, babysitting or cleaning the garage are a few great places to start.
- Provide Rewards: Clearly communicate the “wage” your child will earn before finishing a task. Once it has been thoroughly completed, immediately provide the reward in two piles – half for savings, half for spending. This will directly connect the reward to the completed task, allowing them to link the two together.
- Spend 50%, Save 50%: Teach children the value of both spending and saving their earnings. Encourage your child to set goals for future purchases. Once they have saved up, take them to the store to select the item themselves. When it comes to savings, take your child to a financial institution to open their very own savings account. When they have a deposit, take them with to encourage ownership of their money. Your child will begin to develop the ability to understand how transactions and using money truly works.
- Create a Budget: When your child wants new shoes or school supplies, provide a set budget before shopping. Make your child aware of the amount and explain any amount spent above the budget will come from their own account. Soon they will learn how a budget works and be able to decipher wants versus needs.
- Make it Fun: When teaching your child about money, don’t forget to make it enjoyable! Celebrate small milestones like increasing their savings or purchasing an item they were saving for. Children will be more apt to participate and learn if they find the experience exciting.
Practicing these tips will teach your child the value of both spending and saving. Creating good habits now will positively impact money management later in life and allow them to enjoy a life of financial stability.
Questions about financial success? Explore Marine’s ‘Financial Education’ page today.
Subject Matter Expert: Michael Barnhardt – Iowa District Manager