You will never run out of money lessons which you can impart over to your children. From how and why they need to save money to an actual piggy bank they have to fill up. Even as they get older, there will always be something you can teach them. Just imagine that you, as an adult still have moments where you learn from your financial experiences.
This is another source of valuable money lessons you can give your children. Apart from time-tested theories, share your experiences as well. These can help your children navigate through their finances armed with life lessons from you. These are some of the things that they will never read in a book or learn in a classroom.
As they look up to you as financial role models, you need to make an effort to get your finances in shape as well. Your children will most likely copy how you and other adults around them manage their finances. This is the reason why you need to keep your budget in line. It is also best to surround them with people who can give them great pieces of financial advice.
Done right, they can end up having a financial approach like these teens as reported by Guampdn.com. These young ladies knew that they did not have to spend a fortune just for one night. They are looking for ways to save on things they need for the prom. It can be choosing to buy online for the discount or even allocating time to look for a less-expensive dress.
As a parent, you want to impart as much money lessons as you can to your children. This gives them the opportunity of managing their finances better. Here are a few more ideas to look into when teaching your children money management lessons.
Teach them the basics
In whatever you do in life, isn’t it a little easier when you understand the basics? Just take your job for example – you get better at it when you understand the process. You have an idea how to do your job and how to be good at it. The same with your children, the more they have an idea how to do things, the better they can be. With this, there is no better way to get them started than teaching them the basics.
Much like everyone, getting your children a piggy bank and teaching them to save is a good start. It is even a good way to make them understand to never underestimate the power of pennies. It can help increase any savings amount. Apart from saving, you can also get them started on the basics of earning and spending money.
These are some of the most basic money lessons you can teach them to help them understand more complex financial situations in the future. Being able to impart these valuable lessons at an early stage in their life will make it easier for them to make bigger decisions later on.
Explain the need and process not just the end goal
As you endeavor to teach your children proper money lessons, put in an effort to explain to them why they have to do things. Do not just focus on what they need to do and how they can achieve it. Make them understand the need for every action. This will help them create a process in their actions which stems from understanding the need.
Much like how they have to fill up that piggy bank with money. As much as the goal is to fill it up, they need to understand what it is for. Is there something they want to buy? Do they want to help someone out? Take this story shared by FBherald.com where young girls put up a lemonade stand. However, they donated their profit over to their local fire station. There has to be a need and purpose which drives their actions. As they begin to understand this, they can better plan the actions they need to take.
Let them try
As a parent, you can teach them and let them know everything you can about managing their finances. However, one of the best teacher in life is being able to experience things and this cannot be more apt with finances. You need to let your children experience how it is to earn their own money and how to put them away to save.
You can give them chores around the house so they can equate work with money. This helps them associate that to earn money, you have to work for it. It does not magically appear in your wallets or even in the ATM machine. Let them experience how it is to work for their own money so they get to appreciate the value of hard work
Letting them fail is one of the best money lessons for children
As they experience things for themselves, you need to let them fail as well. This is where financial wisdom can come from early on in life. You will still be there to guide them but try your best not to slip them a dollar or two when they fail to meet a target. Resist the urge to give them money even if they fail to do any chores at home.
The idea here is to let them experience failure in hopes of motivating them to do better next time. Guide them and help them understand why they were not able to meet whatever financial target they had. It may have been a case of mismanaging their time. They ended up spending more time doing something else. It may even be having an impulsive spending habit and using the money even before reaching their target.
Let them solve it
One of the most important aspects of this experience is letting them have a hand in solving their problems. You can help identify what they need to do but let them solve their own shortcomings. If they have to add more chores then let them. If they find that they need to put their lemonade stand in a better location in the neighborhood then let them look for a new place to set up.
For older children about to go to college, let them understand the difference between private and federal student loans. This can help them make better decisions on what types of student loan to take out. This is because the more they understand the difference between the two, they can better weigh the pros and cons.
The idea of helping your children learn financial lessons early on in life is to equip them with as much knowledge as they can for the future. You will not be with them all their life. There will be times where they would have to make decisions without consulting you. This will become more apparent the older they get.
The money lessons they get from you can be the deciding factor between saving up for a purchase or taking out a payday loan. It can even help them pause and weigh the advantages and disadvantages of having too many credit cards in their budget. This is where the lessons you give them now will play a crucial part in the future.