Ten Great Tips…
Ten GREAT TIPS… to teach your kids financial responsibility
Help your kids learn to appreciate and manage their money. Teaching them early can prevent a host of problems later!
©2008 Beech Acres Parenting Center; www.beechacres.org
- Start early! By the time kids reach their teens, they should have had experience with saving, earning, and spending money. They should understand the need for trade-offs when it comes to deciding how to spend their money.
- Use an attractive savings chart so that younger children can see their savings grow until they can purchase the item they’re saving for. (The I Can Make It Happen chart in the Parenting Toolbox is ideal for this.)
- For older kids who enjoy the computer, create an excel spreadsheet that helps them track the money they bring in against the money they spend and save.
- Use allowances to teach kids to budget for what they need and save for what they want.
- Teach kids about interest rates and the value of time by helping them open a savings account. Or help your preteen purchase one or two shares of stock and track its value over time.
- Show kids the value of comparison shopping. Give them the opportunity to learn that with the same $20 they can invite one friend to a restaurant – or, with planning and creativity, several friends to a small get-together at home.
- Don't be afraid to let your kids make a mistake! Learning that there are limits to what they can buy with the money they have is a key lesson – and kids learn this by testing it out. A little disappointment when they're little can prevent them from making big mistakes later on. It's hard – but don't always jump in with a few extra dollars to prevent disappointment.
- Encourage your teenager to have a part-time job. There's nothing like work when it comes to teaching the value of a dollar.
- Consider allowing your teenager to borrow from you for a major purchase. Write up a formal loan agreement with clear terms so that she has a safe experience of "credit."
- Involve kids in some of the family's financial decisions. Let them be part of choosing the trade-offs – camp or a vacation? Dinner out or a new blouse? One pair of designer jeans or two pairs of a non-designer brand? It's important for children to learn early that making choices is an active and positive way to manage their money, rather than feeling mistreated when they don't get everything they want.