Money. Everyone wants it, but no one knows how to use it; at least, very few people know how to use it properly. And if money is managed poorly, this behavior can trigger significant problems. To prevent this, it’s best to get into good money management habits at an early age. It’s highly recommended to educate your children early and often about the pitfalls of poor money management, so I figured I’d put together a small list of tips and tricks for parents.
Make money a part of life
The easiest way to teach your child about money is to introduce it to them. Make sure that your children are exposed to it so that they can understand the basics of it. That doesn’t mean give them an allowance and tell them to spend it wisely. Instead, take them with you to buy groceries, teach them about wise spending, compare prices and products. Show them the interaction at the register.
You can also show them your bills. Many parents feel as though children shouldn’t be burdened with the details of bills, but this couldn’t be further from the truth. The earlier they see finances, the faster they will learn. Show them how much money is being made, and how much is being spent on taxes, bills, necessities, etc.
Set the precedent
If you are going to teach your children about money, then you should follow your own advice. Don’t tell them to spend wisely, then turn around and purchase a brand new car when you’re struggling to pay your mortgage. Naturally, children tend to look up to their parents, and so you must be the shining example of financial literacy. Again, make them part of the larger discussion. Tell them why you spend what you spend. It will give them a clearer understanding of how to manage their own finances.
Pay them for additional work
Look for opportunities in which your children can earn some income. Are there dishes in the sink? Ask them to wash them. Does the lawn need mowing? Tell them to grab the mower. Make sure that you explain the importance of an exchange of money for services, and they will understand the value of money. It can also give them a bit of work ethic, which can prepare them for working in the future.
Financial literacy is important for anyone to understand. By educating your children about money, they are given a better understanding of the financial world ahead of them. And at the Opes Group, we want everyone to have the best understanding of their finances so that they can make the best decisions possible.