Introducing your children to the concept of how to become financially responsible can start at an early stage. Raising financially responsible kids can have their own advantages. Your kid starts learning about the value of savings, spending, and shopping wisely, managing expenditures smartly, etc.
Raising your kids with such knowledge from a young age not just bring awareness about money and its worth but also increase their confidence.
Let’s look at some tips to raise financially responsible children:
Talk about how you budget for the month:
Though it is not recommended to pass off adult stress on children, it makes sense to discuss how toplan budget for the month. The more we discuss things such as saving for retirements & paying bills before we spend the money we earn on non-essentials, the more chance we have to offer our children a basic insight of the cost of living.
Lead by example:
Your kids are often influenced by your actions, teaching them about money management by limiting your shopping trips alongside other shopping expenses can also help. Teach your kids that you can spend on another important purchase in the future because you saved today.
Take your child to the bank:
Today banks let minors open saving accounts with a minimum balance amount. Opening a savings account for your child will teach them about the banking procedure, how to make use of savings, and with the age-appropriate concept, parents can teach kids how the savings in a bank account can earn interest, which eventually becomes a large sum in the future.
Teach them to track their expenditures:
It’s critical that you ask your child to track their expenses. Letting them know how to track their expenditures will bring awareness in them regarding their spending in case if they’re spending more than they’re supposed to save. Financial education is really important for kids; hence educating them about their overspending and how they can curb their spending will prove to be very useful in the future.
Let your child make mistakes:
Let your child earn some money doing a few household chores for you. Give them a small amount of money and see how to manage it. If, in the process, they make a few mistakes, let them deal with its adverse outcomes. This will definitely help them in making smarter monetary decisions in the coming days.
Stock your home with games that teach money management skills:
You wish your kids to be comfortable with math and numbers all through their lives. Age-appropriate games you can consider are Money Bags, Moneywise Kids Game of Life, Payday, Easy Money, etc. Make learning money management skills fun for your kids!
Teach your kids about the rewards of paying bills on time:
This is a golden rule to follow when you want to raise financially responsible children. This essential practice is your best opportunity to talk about good and bad credit. This is a vital money management lesson for older children, especially.
Following the aforementioned steps doesn’t provide you an assurance that your kid will become financially independent for the rest of his or her life, but it is certainly a foundation that you may consider to set up if you want to raise financially responsible children. Contact Sunil Chugh Financial Planner in Mississauga for more competent tips on financial planning.
Disclaimer: The information in this commentary is for informational purposes only and not meant to be personalized investment advice. Please contact your investment professional for investment advice and before investing in any product. ACPI does not publish market research and Sunil Chugh is not registered as a research analyst. The content is from sources believed to be accurate and the opinions expressed are those of the author and do not necessarily represent those of ACPI