A great way to start teaching your children about the importance of money is having open, honest conversations. However, there can be some topics that are a bit tougher to approach than others. Here are some tips for money talks with kids.
As soon as your child is able to understand the concept of money, you should start talking about it. A good place to start is earning money for doing simple chores around the house to enforce the idea that their parents work hard to earn money to take care of them. Take them to your financial institution to open a savings account for their money.
You obviously don’t want to overwhelm your kids with any financial issues you may be dealing with, but it’s also a helpful lesson to be transparent. Maybe your child doesn’t understand why their friend gets to go places or gets things that they don’t. Talk about how everyone has different priorities when it comes to their spending choices and this is what your family does.
Introducing your children to the idea of charity and giving back to others is an important lesson. If they consistently see examples of their parents donating their time or money to people in need, the more likely they are to carry these lessons into their teenage and adult years.
When your kids start earning money of their own, it’s time to start teaching them the principles of budgeting. This can be as simple as splitting their money into three separate groups: save, spend, and share. Save is money that will go towards their savings account, share is money that can be used to help others, and spend is money for them to use how they want.