Teaching Kids to be Smart Spenders
Raising children to be smart spenders can be a challenge to many parents. Creating a healthy relationship with money from an early age is important. Here are things your kids need to do in order to grow up to become financially responsible.
Wants vs. Needs
The first thing your child needs to learn is the difference between wants and needs. We all have seen those kids that walk into a toy store and want everything they see. They have no control and won’t take no for an answer. It’s important to teach them that things they want come with a cost. There is a difference between what they want and what they need. They need to learn to take care of their needs first and then spend money on what they want.
Let Them Earn Their Own Money
Another way to teach your kids the value of money is to let them earn their own money. This will help them see that money doesn’t grow on trees, and they need to be wise spenders. When they earn their own money they will be able to see the value that it holds.
Set Savings Goals
When they earn their own money, you can begin to take it a step further. You can set savings goals for them to hit. This will ensure that they are not just spending the money that they earn right away.
Give Them A Place to Save
Giving your kids a place to keep their money is a great practice. One easy way is to give them a piggy bank when they are younger. As they get older, you might consider opening a savings account for them. This way they have a place where they can see their money grow, and it provides your child a way to track it. You can open a joint bank account for them with your name on it. A bank account can also set them up for success in the future.
Reward Them for Saving
Giving your kids small rewards can give them an incentive to save money. You reward them for hitting their savings goals by taking them to their favorite restaurant or even just the park. You don’t have to spend a lot of money on the rewards but just have to make them feel special.
Leave Room for Mistakes
There is a lot to be learned from making mistakes. It’s important to remember that your kids are not perfect with money and neither are you. Learning how to spend money is something that is learned by experience sometimes.
Act as Their Bank
Another way to teach your kids the value of money is to act as their creditor. You can lend your child money if there is something they really want, but charge them interest. This way, you can teach them that if they want something, it’s better to save for it.