Being a parent involves teaching children so much, but one of the most important things we can teach them is to by financially savvy. My kids are now 20 and 16 and I’m starting to see the results of my parenting methods (oh boy, sometimes that can be scary!!).
Here are a few of the lessons that we taught our children over the years:
1. Cash is king! The biggest lesson we taught them was that if you don’t have enough cash to purchase an item you don’t need it. Credit is only to be used under the most extreme circumstances. Saving up the cash gives them time to really consider how much they want an item.
2. Avoid credit. Both of the kids know that we are completely anti credit. We have talked to the kids extensively about how easy it is to abuse a credit card and get yourself into a situation where you can’t meet your monthly obligations.
3. Save money. A portion of their weekly money should be set aside into savings. We consider this a “rainy day” fund. They have learned that life happens and you never know when unexpected expenses will crop up. My son learned this lesson through owning a car and having to pay for repairs. Having money in savings allowed him to pay for car repairs right away.
4. Allowance. By giving the kids an allowance they learned how to budget their money. If they only received $10 and an item they wanted was $20, they learned, through life experience, that they needed to be patient and wait to make their purchase. In my opinion, giving them an allowance ensured that they didn’t fall into the “instant gratification” trap.
5. Role Model. I’m saving the best for last. If you want your children to be financially savvy you have to be responsible with your money as well. The kids have watched us save for major purchases, pay bills on time, not over extend ourself financially, plan for retirement, and have some life insurance. I found a Genworth Financial to be a great resource when researching life insurance options. Additionally, there is a great article at CNN money with tips for planning for retirement.
I am really proud of my kids for being so smart with their money. They have really shown me that these lessons have given them a great financial fondation for life.
disclaimer: Information for this post is sourced from Genworth Financial in partnership with the SheHeard Influencer Network.
These are great tips for teaching kids financial responsibility. We use them often with my kids. They are learning they have to work for money, and save up to get what they want. No credit is allotted to them.
We have talked to JDaniel about credit too.
Great post! I cannot stress how important it is tpo start teaching children about money…especially credit!
My boys are too young to really grasp the idea of “money”. My oldest thinks it is easy to attain. Once he is a bit older we will start with an allowance. Thanks for your tips!
I think we’re dealing with a lot of the same teen-raising issues right now! LOL Luckily, Angeline understands a budget and how important it is to save, but she also really loves spending money on frivolous crap!
My daughter is a toddler by I’m really concerned with teaching her about finances when the time is right. This post is such a GREAT tool! Thank you for sharing!
These are really great tips! I think it’s so important to talk with children about financial responsibility. I wish my parents had had these discussions with me.
Great tips! I couldn’t agree more.
My biggest thing is deciding at what age to start an allowance. I want to tie it in with chores and responsibilities (which my 5-year old has started). I am leaning towards starting it when he starts school.
I needed this lesson when I was younger!!! Kudos to you for teaching your kids about money when they’re young!!
Those are great tips! I agree, cash is king and no credit!
All great tips!
Great tips! My kids are still young but I am doing my best to keep them financially smart.
What great tips! No credit is key!!
These are great tips. I definitely think my parents avoided money talks with us and I don’t want to make that mistake with my kids.
What great lessons to teach your children. These life lessons will be so important as they get older.
Great tips! My daughter is a great little saver even at a young age. Hope she keeps doing it!
These are great tips! We’re slowly starting on money topics with our 3yo – things simple like giving him a quarter (or a dollar) and letting him pick out something at the store that he can afford with his money. One time he handed the cashier his money and said, “Now, when you’re doing with that, please give it back to me.” HAHA! So cute- oh, if only they gave it back! lol
I think an allowance is a great idea, I want to start one with Mason in a couple of years but for now we do what Emily mentioned giving him a little money and letting him spend it however he wants but within what we give him i.e or dollar or two!