Think back to your childhood. Was it all sand castles and dodge ball or did you have a paper route and a lemonade stand? How we learn about money as kids may not always define us as adults, but as we get older a healthy relationship with money does make life easier.
Raising kids is expensive and after paying for their everyday needs you may not have a lot of extra money to put aside for savings. That’s fine, teach your kids about money and let them work for the things they want. That may sound harsh, but the earlier kids learn how to earn, save and manage money responsibly the better off they’ll be.
Here are four ways to help your kids grow up to be financially responsible adults.
1. Give them chores around the house
We all work for our money and your kids should too. Parents most likely need the help of their kids around the house so why not reward them for a job well done — that’s how it works in the real world.
Giving your kids a clear list of what has to be done with a timeline along with the amount of compensation and payment schedule will help them learn about the value of a dollar. This is a good first step (and foundation) for good work ethics when it comes to earning money.
2. Open a savings account
Once your kids start earning an income it’s time to teach them about saving. Children don’t have any expenses so it’s very easy for them to save the majority of their allowance. Several financial institutions offer no-fee savings accounts for kids, so take your child to the bank and open an account.
Establishing a banking relationship and learning how bank accounts work will be very helpful for kids as they get older because they will understand how to choose products based on their needs. Setting good habits when your kids are young will help them pay for college, buy a house and apply for loans as they get older.
3. Help them find a part time job
If your kids are old enough to work outside the house you can help them find a part time job. That way their salary (if you can call it that) isn’t coming out of your pocket. Do you remember your first job?
I think we can all agree that working for someone else and with other people is very different than doing chores at home. Being accountable to an employer and earning a pay check rather than an allowance gives your kids financial freedom and valuable work experience that they can use after graduation.
4. Have them set goals
There’s nothing more motivating than having a goal to work towards. Saving money is great, but saving for something is better. Parents.com says to teach your kids that saving for goals is cool — and rewarding.
“Your daughter wants a new doll that she doesn’t have enough money for? Tell her to save up! Once she has enough, take her shopping and let her pay the cashier herself. She’ll never forget how good it feels to work toward a goal and be rewarded in the end.”