The way you manage your money as an adult is a reflection of what your parents taught you. Adults who were taught good money habits from a young age are more likely to be successful. By comparison, kids who simply get whatever they want from their parents are more likely to be careless with their earnings as adults.
What Are You Teaching Your Kids About Money?
Research published by the University of Minnesota indicates that most adults develop their feelings and opinions about money based on their childhood experiences and values from their families.
Even if you think you’re telling your kids the right things about money, there are times when you could be sending unconscious messages too. For example, if you’re constantly stressed about finding enough money to cover all your bills, your kids end up associating a lack of money as being stressful.
Straighten Out Your Own Finances
Children tend to learn by example. They learn by watching their parents and other family members and take their cues by interpreting the expressions and feelings they see during certain situations.
If your own finances are in a mess, take some time to straighten out your own financial situation before you start focusing on teaching the kids some money skills. Catch up those past due payments. Work out a budget so you don’t have to stress so much when bills arrive.
If you’re constantly worried about keeping up with multiple different debt repayments each month, consolidate your finances. You should find you’re paying less interest, which can reduce your monthly repayment. Having only one monthly payment to remember also streamlines your banking and reduces your stress about money.
Teach Kids the Value of Earning
Giving a child an allowance to buy whatever they want teaches them the value of saving and spending. Yet it shows them nothing about how that money was earned so it could come into the household in the first place.
Every member of your family should be encouraged to take some responsibility for helping to keep your household running smoothly. Simple household chores need to be done, but when a child participates in some of those chores they learn responsibility and self-sufficiency.
Relating those chores to the allowance received can help teach a child the value of earning money. Effectively, they’re being rewarded for effort.
Teach the Value Of Spending
When children are given an allowance of their own, teach them to take responsibility for their own spending. If they run out of money before their next allowance, let them know it’s okay to make mistakes and explain to them the importance of budgeting their money so it lasts until their next allowance arrives.
Teach Them to Save
Kids also need to learn that they can’t always afford to buy everything they want. If your child wants a high-ticket item, encourage them to start saving towards the purchase price. Discuss ways they might increase their allowance or, if they’re old enough, work on ways to encourage a part-time job around school responsibilities.
Teaching children strong financial habits while they are still young can stay with them into adulthood. A child who understands the value of earning, spending responsibly and saving is far more likely to maintain good financial habits over the long term.