Tips for Teaching Kids And Teens Good Money Habits
Teaching kids and teens good money habits is essential for their future financial well-being. Below are some practical tips we can’t ignore. If we don’t follow some basic positive money management skills our kids might blow the inheritance. As soon as the kids can count, relate financial concepts to everyday situations. For example, when shopping, explain the choices you make based on budget constraints or the importance of comparing prices.
Couponing might be one of the lessons we teach our kids because kids observe our spending habits. Demonstrate responsible financial behavior, such as budgeting, saving, and avoiding unnecessary debt. As soon as your child is born open a savings account for them and possibly take out a whole life insurance policy. Depending on the terms of the policy you’ll be able to use some of those funds on college tuition.
Discuss the concept of earning interest and the benefits of long-term saving.
If you give your kids a weekly allowance, have them start there with their saving and spending plans. As our kids transition into the teen year creating a budget is crucial. Discuss income, expenses, and the importance of living within one’s means. Emphasize the need to prioritize needs over wants. Summer jobs and paid internships are where our teens will understand the value of hard work and money earned. If you’re the type of parent who stretches every paycheck, consider learning as a family how to invest and grow your money. Introduce the idea of investments as a team. Discuss the concepts of stocks, bonds, and other investment options in an age-appropriate manner. And since we’re a materialistic society please enjoy your things, but when the house is cluttered so will be your thought patterns. Individuals with a scarcity mindset often believe that there is a limited amount of money available, leading to feelings of fear and anxiety about financial security. This mindset may result in hoarding money, avoiding risks, and being overly frugal. Lastly, don’t take the advice of one financial guru, always cross-reference information from multiple sources to ensure a well-rounded understanding of personal finance concepts. There is a website called Breadwise.com to scrub financial advice and options from.