In several posts so far this year we’ve covered several ways that you can improve your financial situation this New Year. In today’s post we’ll cover several ways that you can “pay it forward” to the next generation by teaching your kids how to be financially responsible. Parents are responsible for teaching their children countless things about life and how they should be living it. While certain lessons, like being nice to others and treating people with respect, might be more intuitive, the concept of teaching children how to have the right attitude about money can often be a bit intimidating. Below we cover several simple ways that you can start teaching your kids to save more money.
Although this should be common sense, it bears mentioning that the best thing you can do to teach your children the right way to deal with money is to be a good example. While exactly what this example should be depends on your financial situation along with a number of other circumstances, it is extremely important that you display the right attitude regarding money in front of your children.
Too many parents assume that their children simply don’t understand enough about money for their behavior to be affected, but children are often more intuitive than we give them credit for. So make sure that you follow good money principles as a first step to instructing your children. Most children will see their parents swipe their credit cards at the store or take out loans but they won’t understand the consequences of those things unless you teach them. Be a good example by keeping your credit cards paid off and paying off your long term and short term loans as quickly as possible.
Feel free to use one of the most timeless ways of instructing young children about money: the piggy bank. In addition to providing your child with a piggy bank, make sure you take the time to explain the concept behind it; that sometimes they will have to save for things that they want. Often it is a good idea to introduce a piggy bank into your child’s life when he or she wants an expensive toy or item. That way, you can teach your child how saving money can help them buy what they want. Additionally, your child will begin learning self-discipline as he or she learns to save money they receive instead of spending it immediately.
As your child gets older, it is generally a good idea to begin to allow them to make their own money decisions. While parents will generally choose to prevent their kids from spending money on something they will probably regret, this is actually one of the better opportunities for teaching the value of good money management. So within reason, allow your child to make a mistake with their money. As much as they value your advice, a child will remember the consequences of their personal decisions much more vividly.
There is no perfect way to teach your kids how to properly deal with their money. Chances are that at some point you will probably witness your child displaying an attitude towards money that you do not necessarily approve of. Above all, just remember to be patient and understand that good money management skills come with time. As long as you remain willing and able to set a good example and advise your child appropriately, they will learn how to be smarter with the money they receive.