Teaching kids about financial responsibility is one of the most important jobs that a parent has.
Yet many parents don’t realize they should be doing so, think that they’re not qualified to instill good financial sense in their kids or assume that it’s just something that the kids will learn in school. While it’s true that many people are not good with money, that can be changed. They can learn right along with their children and share the lessons that they learned the hard way, so that their children don’t repeat the mistakes. And many schools do have classes on basic money topics for upper grade students, but parents shouldn’t assume that their child is learning–and understanding–everything. Here are some fun ways which parents can help teach their kids to be responsible with money:
Let an older child take over the bill paying. Have your child sit down with you while you do the family finances each week. Let them see how much is in your checking account, see the bills and write out the checks. If you’re not comfortable with this, have them do a modified version where they are given, on paper, a similar amount of money with which they need to pay the bills that their fictitious family has.
Make kids earn their money. While some chores should be done simply because the kids are a part of the family, other less frequently completed jobs, or undesirable ones like washing windows, mopping the floors or cleaning out the fridge can be done for money. Assign monetary values to each chore and post it for the kids to see. If they want money, they’ll need to earn it–just like their parents!
Give them room to make mistakes. It’s never good to shelter kids from minor mistakes that present learning opportunities. The next time you go on vacation, to a carnival, or even to the movies, let the kids have complete control of some of their own money. For example, if you’re spending a day at the fair and decide that each kid gets $30 for games, rides, food and souvenirs, talk with them in advance about how they might budget their money. Perhaps even sort it into envelopes so they can see just how much they have for each activity. Then, once they are at the fair, let them use the money how they want. If they spend it all before dinner and can’t get the foot long hot dog and bag of cotton candy, well, there’s always next year. Be sure to have some granola bars and water to give them so that they do get some nourishment, but don’t give in and let them have the fair food.
These are just three things which you can do with your kids to help them become financially responsible adults. Don’t be afraid to start from a young age; kids as young as three can understand the connection between working and earning money. The earlier you start helping them learn, the better off they will be when they become adults.