Teach Your Child About Money

Do you talk to your children about money?
Do they understand why they can’t have a new toy or an $80 Xbox game every time you walk into a store? It’s a very important subject to teach them about. According to the attached article, curtesy of Jeff, 1 in 5 teens did not know that you have to pay interest on a loan and less than 1/3 of teens know how to budget. Walking into adulthood with this basic knowledge can make such a difference in a young adult’s new life.

Here’s some tips from a few websites and the attached document to help guide you in setting up your child with a good financial base:

https://www.daveramsey.com/blog/how-to-teach-kids-about-money     https://www.forbes.com/                https://www.parents.com/

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1. Use a clear jar to save.

The piggy bank is a great idea, but it doesn’t give kids a visual. When you use a clear jar, they see the money growing. Yesterday, they had a dollar bill and five dimes. Today, they have a dollar bill, five dimes, and a quarter! Talk through this with them and make a big deal about it growing!

2. Set an example.

A study by the University of Cambridge found that money habits in children are formed by the time they’re 7 years old.⁽¹⁾ Little eyes are watching you. If you’re slapping down plastic every time you go out to dinner or the grocery store, they’ll eventually notice. Or if you and your spouse are arguing about money, they’ll notice that too. Set a healthy example for them and they’ll be much more likely to follow it when they get older.

3. Avoid impulse buys.

“Mom, I just found this cute dress. It’s perfect and I love it! Can we buy it please?” Does this sound familiar? The teen age group really knows how to capitalize on the impulse buy—especially when it uses someone else’s money.
Instead of giving in, let your child know they can use their hard-earned commission to pay for it. But encourage your child to wait at least a day before they purchase anything over $15. It will likely still be there tomorrow, and they’ll be able to make that money decision with a level head the next day.

4. Give them the responsibility of a bank account.

By the time your kid’s a teenager, you should be able to set them up with a simple bank account if you’ve been doing some of the above along the way. This takes money management to the next level, and will (hopefully) prepare them for managing a much heftier account when they get older.

5. Help them figure out how to make money.

When you think about it, teenagers have plenty of free time—fall break, summer break, winter break, spring break. If your teen wants some money (and what teen doesn’t?), then help them find a job. Better yet, help them become an entrepreneur! These days, it’s easier than ever for your teen to start up their own business and turn a profit.

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Thank you,

Wenona Mertens