Having good money habits can be one of the best lessons you can teach your kids. Take a look at these financial lessons that can help pave the way for a wealthy future for your kids.
Show them how to budget
Teaching your kids about how to create a realistic budget will not only be helpful for them, but may also help you stay on top of your own finances.
Some ways you can teach your children how to budget include: giving your kids a fixed amount of spending money when you go away on a holiday. Help them work out how much money they can spend each day so they don’t run out of money. Another option is to go to the grocery store with a list and a fixed amount of money and tell your kids they need to buy everything on the list and as a bonus, they can keep any extra money that is left over. This can help motivate them even more to stick to the budget.
Encourage savings goals
If your kids spend all of their pocket money in the first few days of receiving it, then it may be time to step in and help them create a savings goal.
Chat with them about the types of things they want to buy (e.g. computer game, new bike, iPod etc) and then show them how quickly they can afford the item by setting aside a certain amount of pocket money each week.
As well as helping them create a savings plan, you also need to balance how often you treat your kids with gifts or extra money. If you are regularly giving your kids presents or money for no reason, then they may not be as motivated to save money and buy the things they want themselves.
Even though the purchases they are saving for might be small compared to a car or house, having a clear idea of how to save money now will be extremely advantageous for them down the track.
The importance of hard work
Teaching your kids about responsibility and the value of money is an essential part of growing up. If you have children old enough, consider helping them get a casual weekend job. By starting young, they will be able to develop a strong work ethic early and will also learn how to become more independent.
If you have younger children, create a list of chores at home with a reward program. For example, smaller jobs, such as making their bed, may equate to a few dollars, whereas bigger jobs such as washing the car may equal a bigger reward. The sooner your children learn the value of hard work, the better prepared they will be later on in life.