Teaching Kids About Money
Setting your kids up for success means that you provide them with the information they need to be successful in their adulthood when making financial choices. A big part of the guidance you give your children, should be an understanding of money and how it works.
Teaching your kids about money is an important life lesson you can give to them as they grow. In this article we are sharing 3 big topics that kids should be learning about money.
Where does money come from?: Teaching Kids About Money
Children should be learning that money is earned. Teaching your child the lesson of earning the money to buy the extra things they want, is likely to make that item they buy for themselves much more valuable to them than if you just buy it for them. The concept of earning can make a big impact on their view of money.
Some of the most successful entrepreneurs today are thriving because their business ideas solve a problem. Your kids may not be ready to solve the worlds problems, but they could earn extra money by helping neighbors or family members. Cleaning out the garage, helping with the lawn or garden, taking away donation items, baby sitting, or walking dogs are a few ideas for kids to learn the value of money.
- Talk about different types of careers, education, and opportunities to earn money.
- Discuss the value of things with your children.
- Be honest about your finances and teach them as you solve money problems.
Budgeting and Saving: Teaching Kids About Money
More than just understanding where money is earned. We should be teaching our kids about budgeting and saving. A child’s brain will develop the ability to think about long term problem solving as they get older. However, childhood is a good time to begin to teach budgeting and savings tactics.
Piggy banks are a savings plan that most parents can remember having in their own childhood. This is a visual way that children can see their savings grow. Setting a savings goal for a special toy or event, could help to teach your child the rewards of saving.
Understanding the limitations of a budget will be useful knowledge as your children approach adulthood. Overspending and impulse buying is a common mistake that young adults make, that could adversely impact their financial future. Learning healthy spending habits early, could guide your child in successfully budgeting their money as an adult.
- Give your children the task of purchasing a list of items at the grocery store and paying for those items with the cash you give them.
- Talk to them about the difference between “needs” and “wants.”
- Have your children go over your monthly household budget with you as you pay the bills, to help them see a budget in action.
Banking and Financing: Teaching Kids About Money
In their teenage years, setting up a savings account or simple checking account is a good way to introduce your child to banking. This gives them an opportunity to be familiar with making deposits, transfers, and withdrawals, as well as using and protecting their account information.
Using financing or credit is something that adults will encounter when buying a car, setting up utilities, renting an apartment, buying furniture, or buying a home. Taking care of your credit score is a conversation that should start before young adults begin borrowing money. Prepare your teens by having conversations about using credit responsibly.
- Learn more about credit scores and how they are calculated in this article.
- Mortgage 101: What you should have learned in school about home buying
- First Time Home Buyer Success Guide
Teaching kids about money doesn’t just help them connect to the concept of using money. It also helps them develop an appreciation of work and gives them an opportunity to develop healthy financial habits. Our goal is to give you with the information you need for a happy and healthy home, including financial health for your family.
At TexasLending.com we are here to provide our customers with expert mortgage information and help you reach your home ownership goals. Reach out to us when you are ready to buy a home or refinance your current mortgage.