Learning to manage money is something that you are never too old or young to do. Here are a few tips and techniques that you can use to help your kids learn about the importance of money and how to manage it properly, which will help them out throughout their lives.
Talk About Money Regularly
When it comes to teaching your kids to be smarter with money, one of the best things you can do is make money a regular topic of conversation.
Your kids will probably be more interested in money than you think. For many kids, it is something mysterious from the adult world, and they want to know about it.
By simply starting to bring money into the conversation and making it a topic of discussion, you will be helping to break down any barriers for your kids so they can start learning more about it.
They will also feel more comfortable asking you questions about money, so encourage them to ask when there is something they want to know.
Take Out Cash Together
Let your kids help you when you go to the cash machine. You might let them help you to cover your hands when you type in your PIN, and you can use this as an opportunity to explain about the dangers of identity theft.
Show them How Borrowing Works
The best way to find out about borrowing money is to show them a real example. If a situation arises that could illustrate the point, you might want to borrow some money to show them how it works.
For example, say you need to get your car fixed. You could take out a payday loan using a service like www.KingofKash.com purely to show them how it works. You can then pay back the money on time and use it to teach them about interest.
You could also use it to warn them about the dangers of borrowing money and being unable to pay it back, and you could compare it to other ways of borrowing like credit cards.
Show them News Stories About Debt
There are lots of stories in the news about the debt situation of families across the USA, so you can use these to illustrate the real problems people can get into by not learning about finances.
Explain that while it is fine to borrow money that you know you can pay back, it is dangerous to borrow money, like on credit cards, that you are unable to afford.
Open a Bank Account for Them
When your kids are old enough, open a bank account for them. This is a great way to teach them about money. You can go through their statements together and show them how it works, and they’ll love feeling like an adult. It’s also a great way to take away the mystery of banking.
Give Them an Allowance
Rather than give your child pocket-money that they spend on the same day, consider setting up an allowance for them. It does not have to be a large amount, and even a small allowance is fine.
Give them some responsibilities as well. For example, they may now be responsible for paying for their cell phone bill out of their allowance. This will show them the importance of spending their money wisely.
Go Over Your Bills Together
For many kids, bills remain a mystery, so go over them together when they arrive. Credit card bills can be especially useful because you can explain about borrowing money and paying it back. As they learn more, ask for their input and suggestions.
Check Your Credit Report Together
Teach your children about the importance of good credit for things like buying a home. Rather than just telling them, show them how it works by pulling up your credit report and explaining what it means. Go over it together, and explain ways that you can improve your credit score.
Use Real Examples to Teach Your Kids About Cash
Your kids are never too young to learn about money. Too many people end up experiencing financial difficulties in life because they do not understand the basics, so ensure that your kids don’t face the same problems by teaching them early on.
Use real-life examples that they will find interesting, and your lessons are far more likely to sink in. Help your kids to learn about money when they are young, and you’ll be helping them out for the future.
Sienna Morris works as a personal finance consultant. She also enjoys writing about her experiences as a mom and posts on a variety of family blogs.