The responsibility of parents extends beyond raising happy and healthy kids. It is also about making them financially educated. Everything boils down to teaching them the best money lessons from an early age. The sooner you start with their education, the stronger their basics become. You can help them build a viable foundation that consolidates over time. By the time they grow up, they will be money savvy. Here are some financial lessons that parents should teach young children right from the start.
Discuss the difference between needs and wants
It is crucial to teach your kids the difference between needs and wants. The rule is simple- if they cannot survive without something, it is a need, and otherwise, it is a want. Start educating them about the difference when they are very young. It helps them make better financial decisions to avoid wastage and save money in the long run. Also, it sets them up for a successful financial future.
Set savings goals
A young child should get age-appropriate savings goals, and parents can help them determine these goals. You can consider factors like their current allowance, additional earnings, and necessary earnings to decide a viable monthly saving amount. Once you set these goals for the kids, help them identify ways to achieve these goals. For example, they can look for ways to earn more or spend less to maximize savings and reach their targets.
Have them track expenses
It is equally important to help them track their regular expenses. Knowing where their money is going will make them better at saving. Let them write down their day-to-day expenses and maintain weekly accounts. You can use a debit card for teens, and pick one with an app that sends you notifications about their spending. It helps you keep track of their expenses and curb unnecessary ones when you notice them. Encourage them to change their spending patterns when they seem to lose track.
Let them earn their own money
The best way to teach kids about money is by letting them earn their own. It will make them more conscious about spending and saving. Teens can take up odd jobs, and parents can play a supportive role to help them find the best opportunities. If they are too young to work outside, reward them when they help you at home. Give additional allowance for small ones like washing dishes or helping with cleaning. Even small earnings take them a step ahead towards financial independence.
Leave room for errors
Even adults make money mistakes, and you cannot expect perfection from young children. Leave room for financial errors because they help kids to learn. Also, it is an essential part of putting them in control of their money. Although it is tempting to step in and save kids from a potentially costly mistake, give them a chance to go wrong. It will enable them to learn what they must not do with their cash in the future.
Teaching kids money lessons is a challenging part of parenting, but you can do it easily with the right approach. Parents should start when children are young because the best time to begin is now.