For many, the concept of money and value is not a regular topic discussed among parents and their children. Still, the importance of understanding what something is worth and why is crucial to anyone’s child for future spending and saving habits of their own down the road. As a parent, establishing the correct mindset about hard work and earning is a fundamental role toward a child’s financial learning. Without you, these ideals of fiscal responsibility may get lost.
One of the most important things to remember as a parent is to talk openly and frequently about money and spending. Remind your kids how much something might cost, make them decide on one purchase over another, and involve them in your financial decision-making processes. You may be providing the means for them, but make sure they are learning from you and not just relying on you when it comes to money. It also doesn’t hurt to show them the bills you are paying, the checks you are writing, and the taxes you are burdened with. While a deep understanding of the material may not occur until later in life, these children will grasp onto these early teachings from you.
Another easy way to help your child understand finances of his or her own is to set up a system they can understand. Through allowances, different rewards for different chores, and simple financial structures, a sense of financial identity and self-monitoring will occur naturally with your child. An example I had at an early age was a structure of three separate categories: Saving, Spending, and Giving. While I could put as much money as I wanted into my savings jar, I was limited to how much could be set away in the spending jar. Also, I was required to have a set amount of money in the giving jar. This not only forced self-control onto my spending habits, but also showed the importance of charitable donations from the money I worked hard to earn. I was able to give that away to anyone I chose and each time, while I may have liked to put it in the spending jar, I felt good about myself and what I was able to do for someone else.
Last, involve your child in the big financial decisions you are making for yourself. Whether it be a new car, upgrade in appliances, or even a different paint job in your kitchen, take your children along and have them help you. Even though they might not have much influence on the final choices that will be made, giving them the privilege to an opinion is something they will value when it is all said and done. This will also help them to pay attention to the many changes that are occurring around them with the feeling that they are a part of it themselves.
Money management and personal financing is a topic less frequently discussed than something like a history class in education systems around the United States. Still, this topic is just as (if not more) important to learn and develop as children go from youth to young adults. Be deliberate and take responsibility for your own child’s learning by setting a good example for them to follow.