If you want to impact your child’s life, teach them the value of money and how to handle it from a young age. Today there are so many people who struggle with money because they were never taught how to manage it.
As much as I love the American education system, you can’t trust the school system to teach your child about money. Most schools don’t have any financial programs and spend more time on core subjects like math, science, and English.
I don’t want to see your child fall behind, so let’s talk about teaching your child the value of money!
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How to teach your child the value of money
Chores and Allowance
Start making your kid do chores! Chores are excellent for parents because you can start getting help around the house. For the kids, it teaches them that in order to earn a reward, such as money, they must work for it.
You don’t have to pay your kid much to help out around the house, and if they are real young, they won’t have much need for money. The goal is to start getting them in the mindset that doing work earns something fun.
Have them open a bank account
Take a field trip down to your local bank and have them open up their very first bank account. Now your child can feel ownership of their account and learn that money is stored in a bank account.
If you would rather not open up a bank account in their name, consider getting them a piggy bank. Even better, have them save up for their first piggy bank.
Have them track their money
Help your child create a system for tracking their cash flow, such as through an excel spreadsheet or written down in a notebook. Budgeting or tracking money is a skill most adults struggle with today.
When they earn their allowance, take them to the bank to make a deposit. With that deposit, have them write down they deposited, say $10, into their bank account. Help them track the money so they could tell you how much money in total they have in their bank account.
Same concept if you are using piggy banks, they should be able to refer to their spreadsheet to let you know how much is in the piggy bank. For an added challenge, you can get multiple piggy banks that represent savings for different things such as toys, ice cream truck, and other purchases.
Tip: Make one of the piggy banks savings for college and that a certain amount of all earnings goes into that bank. Setting aside a set percentage will help them learn to save for the future and not what is immediately fun.
Whenever your kid wants to withdraw money from their bank or piggy banks, make sure they track it on their spreadsheet and write down what they spent it on!
Set Savings Goals
Savings goals are a great way of teaching your child discipline. With discipline, your child is less likely to use credit cards or take out other loans.
Let’s say your child wants a brand new bike. Tell them that if they can save up for half the cost of the bike, you will cover the other half.
Now your child has the motivation to save money because there is a reward at the end of the money savings. This mindset will also help your child become a saver rather than a spender.
Have them pay in cash
Our world is increasingly digital and swiping a card doesn’t register in our brain as pain because we can’t see the money leaving our hands. However, giving up cash and seeing the cash amount lower does register as pain in our brain because we no longer have it.
Paying in cash is one of the most valuable lessons for responsible money handling. Don’t let them get out of paying with cash until money responsibility is deeply ingrained in your child’s brain.Sharing is Caring!Click To Tweet
Watch Your Money Attitude
Your child truly looks to you for picking up habits, good and bad. If your child sees you spending money carelessly, your child will also pick this pattern up no matter how much other responsible money training you have done.
Children are very impressionable. Always lead by example and explain your money decisions to your child, so they don’t interpret your spending habits wrong.
If you are looking for ways to save money, consider joining our free course on budgeting and saving money. The course is aimed at helping families with their finances so they can save more money every month.
What other money tricks have you done to teach your kids about money responsibility? Let me know in the comments below.