Being financially savvy is one of the many gifts you can give to your kids. But it’s not easy to raise children who have good money management skills. For one, it takes years of training to instill in them the habit of saving especially in their early years wherein they still have a vague concept of money.
You will also have to make conscious effort in practicing good money habits yourself to serve as a model for your children. Your words of advice to them won’t matter if they don’t see you doing what you teach them to do.
So how can you assure that your children will grow up having a healthy attitude towards money?
Include them in making the shopping list
Creating the list together will let children understand what are deemed important for the house such as toiletries and food supplies. You can first ask them what they think you should include in the list and write down whatever they say. They can then rank each item according to priorities.
You can also discuss to them why you have to let go of some to give space for alternatives that are better in terms of price and quality. By engaging children in making the household shopping list, you give them the opportunity to learn about prioritizing, one of the essential skills needed for good personal finance management.
Involve them when you actually shop for the home.
It’s highly possible that your children will be begging you to buy the toys they see while in the store. While this can be an annoying scenario, consider this as a chance to explain that if you buy the toys, they need to give up something or you won’t be able to buy an important item for the home. It’s also a good chance to teach about delayed gratification, which is another essential for good money management.
Shopping with children also allows you to show to them how you strike a balance between price and quality when choosing products from various brands. You can give practical money tips from time to time, too.
Moreover, you can also give the shopping list to them and let them choose the products themselves to give them a sense of responsibility. Of course, you should be there to guide them and ensure they make wise choices.
Let them know about the bills to pay.
Help them understand the implications of the utility bills in connection to money and to the household’s electricity and water consumption. Most importantly, inform them that they can help reduce the bills and save more money to buy the more important stuff if they take part in conserving water and energy.
Let them know that as simple as practicing the habit of turning off the lights and appliances when they’re not in use or preventing water from unnecessarily running out of the faucet can greatly help in reducing the bills. Of course, you should also practice saving water and electricity.
It will also help if you teach children how to read and monitor the water and electrical meters used to determine the household consumption. The kids can experiment on how fast or slow the meters run depending on how many faucets or appliances are currently being used, and thus, will have an understanding of the grave effects of wasting water and energy.
Help them understand how doing chores can save money.
While it’s a common advice to teach kids about the value of work in order to earn money, it’s not wise to constantly put financial rewards on household tasks. Although most kids hate doing chores, they have to realize that it’s important to do these tasks to keep the house clean.
But most importantly, doing the chores can save the family more money because you won’t have to hire someone else to do the job. If children help in washing the car, for example, the family won’t have to spend for premium car wash services. Moreover, if kids are trained to clean the house regularly or at least to clean as they go, the family can reduce their expenses on professional cleaners who are paid per hour because they won’t have to stay long in the house.
Teach them to save whenever they receive money.
Whether it’s an allowance from you or cash gifts from relatives and godparents, help your children instill the habit of not spending the money right away just in case they need to buy something more important in the future. You can opt to use transparent cookie jars or if you want to further introduce children to the concept of interest income, you can open a savings account under their name.
Final Words: Train Children As Early As Possible
Raising money-savvy kids require time, patience and constant reminders until the good habits become a natural thing to do for them. Don’t forget your role, too, as you have to walk your talk because children often follow what adults do despite the verbal advice given to them.
Mari writes for Loansolutions to help educate people in making informed-decisions on taking out loans and becoming responsible borrowers. Being the COO, she feels it is her social responsibility to do so. Learn more from her as she shares tips, advises and stories on finance. Also, she’s fond of 9GAG, so you might read some random stuff over here.