Every parent wants their child to grow up to handle money responsibly. Many of us know from experience what financial dangers await them when they approach adulthood. It’s wise for us to prepare them now with knowledge and experiences that help them manage money well in their adult years. Below are some actions parents can take to begin shaping childrens’ money knowledge.
1) Discuss money with your child. Children need to know that money has to be earned. They need to know that it is finite (there is only so much). They need to know that it’s a result of work.
2) Encourage saving. Children need to see the value of this at an early age. Simply getting a clear plastic container and putting their money in there can be a good start. A parent could even put a picture of their desired purchase on the container as a visual reminder of why they are saving their money.
3) Discuss giving. Teaching the value of giving can do wonders to help your child be a helper of those in less fortunate situations. Dropping change in a Salvation Army tub or the offering plate at church can be opportunities for your child to know they are helping others. It’s also smart to teach your child that they can give in non-materials ways as well. Activities such as helping the elderly with lawn care, planting flowers at their school are a few examples of help that doesn’t cost money.
4) Start working early. Children need jobs. As early as 3 years old children can begin doing tasks around the house. These jobs need to be age appropriate and well defined. It’s OK to pay them for additional jobs that you find acceptable. They have to complete their non-paid jobs first, however.
5) Partnering up on meeting goals. Parents of preteens and teens can partner up to help their child reach financial goals. If a child wants a $300 game system the parent can match every dollar they save up to $150. The child gets exposure to goal setting and responsibility while the parent ponies up to the agreed upon match. This can even apply to college spending money as well. If you’re the parent of a college age student summer time is a great time to institute this type of agreement.
What are your thoughts about raising financially smart children? What would you add to my list? Feel free to drop a comment.