18 April 2018

How to Teach Your Children Good Money Habits

As parents, we want the best for our children. We want them to have a good education, a stable job, a happy family of their own, and a prosperous future. That’s why it’s important to guide our kids to the right path. This includes teaching our children about good financial habits at an early age.

We are our kids’ first teachers. It’s our duty to impart wisdom on how to responsibly spend and save money. To help your children establish a sound financial base, consider these practical suggestions from Alpha Car Finance.

Open a savings account.

As soon as they are old enough, open a savings account for your child. Start with a modest amount, around $100 and build up from there. Get your child a piggy bank. Once your kid has filled that up, bring the piggy bank and deposit the amount in your child’s bank account. This will encourage them to save more and build up their bank account.

Be honest with them.

Children are surprisingly perceptive. Even at a young age, they can grasp the general concept of money. Tell them the truth about how things can cost money. Try to explain to them on their level how leaving the lights on and leaving the faucet open can increase your utility costs. This will open their minds to conservation and become more proactive in helping their parents save.

Set a good example.

Children watch their parents and imitate their habits. So, it’s crucial to be a good role model. It’s easier for kids to follow your advice when they see that you practice what you preach. Show them that you are not easily swayed by a sale and you do not buy things out of impulse.

Teach them how to budget.

As they grow older, your children will receive pocket money from you. This is a good opportunity for you to teach them how to budget their weekly money and stick to it. You can also introduce new and creative ideas, like setting a goal. This will help motivate them to save up for something they want to buy, like a new toy.

Teach them patience.

We live in a world where instant gratification is encouraged. Every time a new fancy gadget comes out, we want to be the first ones to have it. To dissuade this type of behavior, teach your kids the importance of having patience. So, even if your children can’t stop obsessing about a new toy, they will not adopt an “I want it now” kind of attitude.

Teach them the value of hard work.

Sometimes, we may think that it’s easier to just give whatever our kids want, just to stop them from throwing a tantrum. If you do this, it will only give them a false sense of entitlement. So, teach your children the virtue of working hard for something they want.

You can start by giving them simple chores, like cleaning up their toys and clothes or making their beds. This will help them understand that any reward they receive can be gained through hard work and instil to them a strong sense of responsibility.

Teach them to get into business.

As your kids grow older, you can encourage them to get into business. It doesn’t have to be complex. They can start with simple things like having a lemonade stand or by selling their old toys.

This is a great way for them appreciate how a business operates and how customer service works. Who knows? Your child could be the next Warren Buffet because you nurtured their entrepreneurial spirit at a young age.

Teaching our children to have good money habits will help them become responsible in the future. What's more, building a solid financial foundation is one of the best things we can do as parents. Be an excellent example to your children, and they will be inspired to follow in your footsteps.

Have children of your own? What lessons do you teach them? How do you encourage them to develop good money habits? Please share your thoughts with us in the comments.

Disclosure:  This is a contributed post.

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