As a parent, you may be wondering how you can set your children up for financial success. Coming out of the COVID-crisis might be as good a time as any to consider sharing valuable life-lessons about money.
Our friends at GreenPath are sharing some helpful tips that can show you how to raise financially healthy kids.
Talk about Money Often and Openly
Let’s change the narrative around money. You can introduce the concept of money to your kids at an early age. As your children grow, continue to deepen the conversation, and help them understand the concepts of money. Doing this will only benefit them and encourage them to be even more financially responsible.
If you’re unsure of where to start, you can also ask a trusted friend or family member to have these conversations with your kids. It’s also okay to let your kids know that you don’t have it all figured out. Explain the things you’ve done and what you would or wouldn’t do again and why, and how you learned from it. Sharing these helpful bits of information is a good way to promote and encourage learning!
Involve Your Kids in Major Purchases
Deciding where to go on vacation? Buying new appliances? Include your kids in the process from start to finish. They can start to get involved by helping with the research, which can make it all the more fun for you as a family. Then, show them the factors that go into making the decision—for instance, when planning vacations, think of destination spots and fun activities you’d like to do while you’re there, and for appliances, you may want to look into brands, prices, and the time of year you’re buying (think holiday sales). From there, you can help them compare all the different options before making the purchase.
Want to go the extra mile? Allow your kids to pay for a major purchase for a more hands-on experience with money. Imagine how your children will feel knowing they did the research to make the best decision for the entire family. Plus, when they look at all the hard work they put into it, that’s bound to make them feel pretty proud of themselves, too!
Teach Your Children Math and Money
Most people don’t learn about budgeting until it’s too late. Imagine what the future will look like for your children if you teach them the value of saving today. Explain to them what compounding interest is and how it works. When you go to the store, perhaps you could give your kids a $10 bill and ask them to purchase part of the grocery list. When could you teach your children about credit? Could you educate them about how credit cards work before they go off to college?
Look at all of these above ideas as opportunities to teach your children about math and money. They’re all things that you could and should be teaching them.
Teach Your Children to Record Their Spending & Saving
There are lots of methods to track your saving and spending habits. Do what works for you and your kids. Here are a few ideas for how you can get the ball rolling:
Notebook and Pen Method: The good old-fashioned notebook and pen method requires you to write down all your daily expenses and any income you may receive. For kids, this would probably be money they receive for birthdays, graduations, house chores, good grades, etc. You’ll keep track of everything coming in and out on a daily basis.
Envelope Method: With the envelope method, you’ll separate your expenses into different categories and set aside some of your savings or earnings into each labeled envelope. This is a way to make sure you’re only using money that’s designated for whatever you have in mind.
Spreadsheet Method: The spreadsheet method is probably one of the most widely used methods these days. You can set it up to be as detailed as you’d like in order to easily track your spending and saving.
Whatever you decide, remember that the main reason for teaching your children about how to track their spending is to allow them to better understand where their money goes. More importantly, this allows your children to successfully handle their money and achieve their goals.
Teaching your kids about money doesn’t have to be a daunting task. If you’re like most people, the hardest thing to do is to start the conversation. But the good thing is, you’ve got people on your side.
GOLD and GreenPath are in your corner and ready to help! Give our friends at GreenPath a call for ideas on how you can start your kids on the path to financial success: 877-337-3399.