Teaching your kids about money involves more than just letting them watch you face palm as you growl at the calculator and the pile of bills on your desk. Don't leave them at age 16 or 17 to discover the pitfalls of credit versus cash after they've received their first credit card.
Healthy spending and money management habits need to start much earlier if children are going to understand how to handle their money properly and respect the consequences of not doing so.
This concept has become even more important with apps, smartphones and debit machines all within easy reach. They make it easier than ever for kids to be separated from their money at the first hint of the latest video game, gadget or activity.
So, here are a few tips to help your kids establish good money habits.
1) Be a Role Model
As with everything else in life, your children are looking to you to set the standards by which they live, particularly how you handle your money.
What do you spend it on? How do you come to decide what to buy at the grocery store? Do you buy the biggest and greatest TV, but a month later grumble at the bill?
It’s so important to teach our children how to use cash, to keep them out of the bondage of the debt cycle, and to be responsible about what are needs and what are wants. They learn all these things from watching you — and, believe me, they’re watching everything you do and don’t do.
2) Make them Earn It
So many parents make the mistake of giving their children everything they ever ask for. Unfortunately, this can turn into a sense of entitlement rather than of responsibility.
Kids don’t learn to appreciate something unless they’ve had to do something to earn it. When they’ve invested their time and money into something they’ve really wanted, they also learn a sense of accomplishment and empowerment.
They become familiar with the ache that comes when they’ve spent their money on one thing only to discover something else they want more a day later.
Children need to feel these emotions and grow accustomed to the idea that money really doesn’t grow on trees.