Children grow up so quickly – blink, and your baby is standing on two feet, going to school and driving a car. Time flies fast when we’re parenting. It’s never too early to teach your little one the tenets of money management.
In fact, learning how to spend wisely from an early age can transform your tots into budget-conscious adults. You can save yourself a few “I-don’t-have-any-money” phone calls down the line, too. Discover what you can do now to raise a smart spender.
1. Start Counting
Start by showing your toddler how to count their cash. Chances are, they don’t have a ton of it stuffed away. Still, you can show them which coins have what value and help them determine how much money they have. This step is a foundational one. Once your child can count money, they can learn how to spend.
2. Save, Spend and Share
Your child can also choose what to do with their money from a young age. Set up an excellent visual tool with save, spend, share jars. This activity is simple to make and explain to your kids.
Your child can put money aside to put in a bank account, spend on toys or donate to others. Help them determine how much of their allowance or birthday money should go into each pot. Later, they’ll have an idea of how much of their paycheck to save.
3. Set Financial Goals
Once your child gets a little bit older — think six- to eight-years-old — they’re ready to lay out financial goals. Help them to set the bar for how much they’d like to save, for example. Perhaps they want to buy a particular toy. You can help them research the cost and count what they have. Then, determine how much more they need.
4. Assign Chores, Pay an Allowance
Your child will learn the value of money by working for it, and elementary-school-aged kids can handle chores around the house. You don’t have to make the tasks in-depth, nor do you have to pay tons for their efforts. However, the process of helping, earning cash and spending or saving it will teach your child valuable lessons for future paychecks.
5. Start Saving For Milestones
By the time your child is eight or so, they should have a custodial savings account where you deposit their saved cash. Bring your little one with you, so they understand where their money goes.
As they get older, your kids can learn how to use a checkbook and read bank statements online. This practice will prepare them to save substantial money as teens. Perhaps your high schooler will put away money from their job. According to one study, the majority of teens — 26% — are saving up for a new device, like a smartphone. Around 17% are stashing money for cars, and 11% are considering college.
6. Be a Good Role Model
To teach your children about money management, you should be good at it, too. Model the behaviors you want your children to mimic. Start with the basics, such as building a budget. Soon enough, you’ll teach your kids to be financially responsible through your actions.
With that, you have six great tips for teaching your children to manage their money. These foundations will guide them toward a future full of smart spending — all thanks to you, a parent who leads the way.