Everyone has a list of things they wish they'd known when they were younger. For parents, it's crucial to teach kids about money so they have the tools they need to succeed as adults.
According to a report from the University of Cambridge, money habits form at the age of seven. Setting a healthy example is an important aspect of teaching, so don't worry too much if you haven't made a big deal out of developing your kids' money skills.
Let kids do it themselves
When we pay with plastic, we are insulated from the "feeling" of handing over money. The same goes for kids. If you handle their money, they won't know how it feels to spend real cash.
Start with gifts and birthday money. Let them decide how to spend the cash and then let them pay the bill, take the bag, and handle the receipt.
Many parents find that their needy child is suddenly frugal when it comes to spending their own cash. While this is amusing, it's also a clue that your child is internalizing important lessons about how and why they should spend money.
Let kids earn money
If your kid wants $20 to go skating with friends this weekend, let them do a few chores and earn the money.
Helping the connection between work and money grow is an important part of any plan to teach kids about money. If your teenager makes $8 per hour and they want to buy jeans that cost $95, you can gently remind them that they took orders at Taco Bell for 12 hours to earn the money.
When your child wants a last-minute trip to the mall for a new outfit, ask them how much of their own money they are willing to contribute to the impulse buy. They may decide to modify their budget or skip the trip completely.
Help your teen use a budget app
For this generation of kids, the paper and pencil budget isn't as reliable. While they should understand the concept of a basic budget, you may have more luck teaching them about managing their money if they have a simple bank account and they use a budgeting app.
Check out EveryDollar. This budgeting app uses the concept of giving every dollar a job. It takes about ten minutes to set up and will help your child visualize their goals and stick to their plan, even in the earliest stages of their money-management journey.
Be sure to check out our additional blogs for helpful information, or contact a local branch if you have questions about personal loans or taxes.
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