Raising Financially Responsible Children
Raising children who are financially wise is a skill developed over time. Here are some key strategies to help with these life lessons:
Money Isn’t Free, It Has to be Earned
When children earn money for chores or other tasks they have completed, it teaches them that money can be earned by hard work. This begins the process of teaching them money management. The key here is to be consistent. Learning to wait until they have money saved before they make a purchase is one of life’s important lessons.
Help Them Save When They Receive or Earn Money
Help them to learn that saving a portion of money they are given or money that they earn is common for those who are financially successful, and that it’s more common than they may realize.
Teenagers Need a Hands-On Approach
Teenagers need to see how adult finances actually work, which helps them to understand the cycle of Earning Income > Budgeting > Paying Bills > Saving for the Future > Dreams Realized.
A good place to start is to show them part of your recent goals and budgets so they understand what you’re working towards, along with the money coming in and the money going out. Help them understand by explaining the money that you set aside for short-term and long-term savings. Even simple things we take for granted need to be taught, like paying bills online and how to fill out a check properly.
Understanding debt is equally important to understanding savings. Teens need to understand borrowing money costs money and the timeframe it takes to pay that money back, along with how they will earn the money they will need. These aren’t lessons learned in one day—rather they are learned through experience, over time.