As parents, we work hard to ensure our children eat their vegetables, brush their teeth, and finish their homework, but one important life lesson that can easily be pushed to the back burner is smart money management. Children are like sponges and learn much of their overall habits in life from their developing years. Why not prioritize teaching about budgeting, saving, and the appropriate use of credit?
Start Them Young
You may not know that kids watch much of what their parents do as a way to form their own habits. This includes earning and spending. Your budget should be a family affair, where the kids get involved in the developing and tracking of the budget. Teach them the importance of setting spending limits for different budget categories, as well as having a budget for the savings. Let kids get involved and help you track your spending throughout the month by having them collect receipts, help you with the register or balance sheet, and checking off the savings goal.
Children should also have their own budget for their individual earnings. Whether its allowance money or money earned from neighborhood jobs, kids should also develop their own spending and savings budget. Have them plan a savings goal for a purchase and hold them accountable. Don’t be afraid to let them experience failing to meet their savings goal from time to time either, as this lesson could be crucial for showing them what it feels like to not have enough for something they want or need. Debt lessons can be harsh, but the smaller disappointment as a child can save them a rough financial road as adults.