No one is ever born knowing exactly what to do with money. This is something that everyone has to learn and it is not always an easy process. Parents should start to teach their children about money from the time they are very young.
Here are 7 things that every parent should know:
1. Expose Your Young Children To Money Early
Even though a young child will not know what to do with money, they should still be exposed to it. This will allow them to get an idea of what money is. Give your child the opportunity to hand the money to the cashier at the store. Play a game of putting spare change into a jar or pretend to be shopping at the grocery store. All of these games will allow your child to learn that money is used to buy things.
2. Delayed Gratification
Do not always purchase something when your child wants you to. They need to learn that they cannot always have something right away. In the future, they will have to save their money to buy things and it is better if they realize that sooner than later. You can start by giving your child a quarter and have them save up for a candy bar when you go to the store. This will allow them to see how long they have to wait before they get what they want.
3. Teach Them Where Money Comes From
Parents do not always feel comfortable talking to their children about money. However, children need to know where the money is coming from. They cannot be led to believe that they can get money out of the ATM at any time or that they can use credit cards for all purchases.
Explain to your child that the money that you earn from your job is put into the bank. Then let them know that when you take money out at the ATM, you are really using the money that you earned from your job. Let your children be aware of the fact that the money you make is what you use to pay the bills.
It might be nice to explain to your children why you are going to purchase something or why you are going to wait. If it is something that you do not need right away or you need to save the money for it, then let them know the reasoning behind your decision.
The best way to get your children to save money is to show them that you are saving your money too. It might be a good idea to get a jar for yourself and your child and you can both add money to the jars for savings. It is an easy way to remember to add the money and if the jars are clear, you can see how much you have both saved very easily. It may motivate your child to save more.
5. Teach Your Teens About Credit Cards
Many times a teenager will start using a charge card and they will have no idea that they actually need to pay the bill. They think that they can just charge everything and not worry about the payments.
It is a good idea to teach your teens that they can use a credit card, but it might be best to have the money for that item saved before they buy it. This way, they can charge the item on the card, which will help their credit, but then they will have the money to pay the bill when it comes due.
6. Let Your Kids Manage Their Money
This is a hard lesson for parents and kids. As parents, we don’t want our kids to make the money mistakes we made in the past. We also don’t want our children to buy junk with their money. However, children need to make their own mistakes in order to learn.
If your child wants something that is not made well, you can explain to them that you do not think it will last very long. They can then make their own decision for whether or not they will still buy the item. If the item breaks shortly after they purchase it, then they may listen to you the next time.
Sometimes our children want to buy something that is really expensive. That is ok but they also need to know that they will not have much money left after the purchase. Explain to them that they will not have a lot of money left and they won’t be able to buy anything else for a while. If they do end up purchasing the expensive item and want to buy something else a week later, do not give in and buy it for them. Tell them that they will need to save their money and then they can make another purchase.
7. You Can Always Say No
A parent can always say no to something that their child wants. A child needs to hear the word “No” every once in a while. It is actually good for them to hear this word.
Even if the child has saved up enough money to purchase a specific item, you can still tell them that they cannot buy it. This may happen if it is close to a holiday, the item is not age appropriate or any other reason that you choose.
It is very important that everyone knows how to use money responsibly. The younger a person is when they learn these skills, the sooner they will be successful with money. Each child has a different personality, so while one lesson may work with one child, it may not work with another. Continue talking about money until they understand everything that they need to know.