Money is such a sensitive topic EVEN among family. I’m not sure why we struggle so much with talking about money since it’s a necessary part of life. Now a little transparency here, I haven’t always been enthusiastic about a money conversation BUT I knew I needed to change that behavior especially in trying to set an example for my son.
Sometimes I think as parents we aren’t sure what information we should and shouldn’t share. Let me be clear, when it comes to money you should share as much as you can. If you’re not sure where to start, here are a few things you can teach your children about money.
Importance of Money
Money is essential so stressing that NOW is critical to them looking at it as a tool to be able to live the life they want. In stressing the importance make sure to mention that having a plan for your money is key to managing it. To get started in showing the importance of money give them some examples of how money is used in your household. You can talk about groceries, their clothes, the house itself, you get the idea.
How to Manage Money
It doesn’t matter how much money you have, if you don’t manage it properly it will disappear. Talk to them about budgeting, which is essentially the plan for your money, that should include saving. One thing you can do to get started teaching them how to manage money is by giving them an allowance and having them divide up the money for spending, saving and giving. You can also take them to a bank and open an account for them. Many banks and credit unions offer child savings accounts.
Delayed Gratification
We have become such an instant culture, see it and want it now. When it comes to teaching your children about money it’s important to instill in them the save up and pay for it method vs the see it and get it even if I don’t have the money yet method. That’s where the allowance, budget and saving come into play. This lesson helps to avoid credit issues later in life.
Good Financial Habits
Children mimic our behavior, so demonstrating good financial habits early on is key. Involve them in the money conversation at home by holding family money meetings. This will demonstrate the importance of money, the care you take with your money (for example by saving and paying bills on time) and give them an opportunity to learn and ask questions. When it comes to financial habits avoid any negative talk about money because this can lead bad financial habits later in life.
Ways to Earn Money
We all know that money doesn’t grow on trees so teaching them early about ways to earn it is important. Besides teaching them to just get a job, talk to them about other ways to earn money including the importance of having multiple streams of income. Introduce entrepreneurship by coming up with an idea to create and sell something. Also introduce them to investing there are many ways to get small shares or fractions of shares of stocks from companies that you are using today. Stockpile is an example of one company where you can buy fractional shares.
There are lots of things to teach children about money but the idea here is to get started NOW teaching them something so that when they get older they will have the confidence they need to make money decisions.
At what age did you start learning about money?