As parents it's our job to try to teach our kids how to live their life with as many good habits as possible. Along with saying 'please' and 'thank you' and washing your hands, this includes learning about smart money habits. It is said that the lessons we learn as children will stick with us throughout our lives and help shape us into the person that we will become. I truly believe this because as I get older I have become set in my ways, and I am finding it hard to change my personal and financial habits. They say that you can’t teach old dogs new tricks and that’s why it’s important to teach your kids about earning money, saving money, and managing their money at a young age.
3 Tips to Teach Your Kids about Money:
Let Your Kids Work for Their Money. Eventually in life we all have to work for our money so there is no point in spoiling our kids at a young age because they will only be shocked later on in life when they have to actually start working for their money. Parents always want to give their kids the best of everything that they can in life, but if you don’t let your kids work for their money, you are not helping them you are only hurting them. Let your kids have some domestic responsibilities around the house (some daily or weekly chores) and give them a biweekly allowance so they learn to work for their money.
Make Sure Your Kids Save Money. Many employers pay their employees on a biweekly basis, so if you teach your kids to manage their money on a biweekly basis, the adjustment into the workforce will be a smooth transition. Living on a budget doesn’t mean that you can spend every single cent that you make; living on a budget means that you get to live on, save and spend a portion of your income without using debt to survive. The percentage of each paycheck that people can save depends on their personal expense. However, since kids have no expenses, they should be able to save the majority of their paycheck (i.e. 70 percent) and enjoy the fruits of their labour with the other 30 percent.
Teach Your Kids About Credit. One of the biggest mistakes that young adults make is using their credit cards, maxing them out, and not being able to pay them off because they never learned how to responsibly use their credit cards. Keeping high balances on your credit cards causes expensive (and unnecessary) interest charges; it also lowers your credit score, which can harm your chances of getting a job and being approved for a personal loan. You can teach your kids about using credit responsibly by giving them a secondary credit card on your account and giving them a predetermined monthly spending amount. This will allow you to monitor their spending and make sure that they are living within a budget. Giving your kids a prepaid credit card is another great way to see where and how they chose to spend their money.
Are you teaching your kids about money?
(*I am sharing this information with permission. Kristina is a lifestyle and personal finance blogger who contributes to QuickQuid, an online payday loan lender. You can view her posts on QuickQuid and you can follow her on Twitter @TKBlogs.)