4 Things Every Mom Should Teach Their Kids About Money
Teaching your kids about money from a young age can be kind of daunting when you think about it. However, it is important that they learn savvy financial skills early so that they don’t have to learn about money the hard way later on in life. As Mother’s Day approaches, let’s talk about some of the money lessons your kids need to know while they are still young.
Learning how to save money at an early age is very important. If they get into the habit of saving when they are young, then it won’t be hard to continue doing it for years into the future. To help them learn about saving, give them a set allowance every week or 2 weeks and show them how to spend some and how to save some. Make sure that they put the “saving” money in a separate piggy bank or money jar from the spending money. As they are putting their money away, tell them why they need to save money and the importance that it has later in life.
For a fun lesson on saving, get them to make a savings goal. It could just be a certain amount they want to reach or a big ticket item like a game console or a new bike. Whatever the goal, have them make a saving poster that they can hang on the wall and track their progress. Every time they put more money into the savings jar, make a big deal about marking it on the poster. This will give them a visual of their savings and make it more fun and exciting.
Your kids need to know all about credit unions and banks. When they are old enough, help them learn by taking them to open up checking or savings accounts in their own names. Show them how to deposit and withdraw money, balance their checkbook and check their balance online. The more hands-on experience they have with banking, the easier it will be when they are on their own.
Learning about credit cards, loans and other lines of credit is essential to raising money savvy kids. Teach them what consumer debt is and how dangerous it can become if not handled correctly. Talk to them about the different types of loans they may encounter in their future like school loans, auto loans, mortgages, etc. Explain what interest rates are and how to find the best interest rate for the loan you are seeking. Show them how to be responsible with credit cards by giving them examples from your own experiences–good or bad. If your kids go off to college or into the workforce knowing all about credit, they will be way ahead of the game when it comes to handling financial matters on their own.
Another great money lesson to teach your kids is how to handle bills. Teach them what bills are, why you have them and how to pay them. Whether it’s a physical bill or an online version, take them through your bill paying routine. Show them the importance of paying them by the deadline and explain to them what will happen if you pay too late or not at all. Teach them how to keep track of all their bills’ amounts and due dates. This is an essential part of growing up, and you would be surprised to know how many teens/young adults leave home and have no clue how to handle their newly acquired bills.
Preparing your kids for their future by teaching them these basic money lessons will only further your dreams of them becoming self-sufficient, responsible and financial sound adults.
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