- Create an Open Dialogue. An open dialogue between parents and children can make a big difference in their perceptions and attitudes toward finances. Share with them financial mistakes you’ve made or lessons you’ve learned. Use those experiences as teaching opportunities and get them thinking about their own financial habits.
- Teach them How to Save. One of the best ways to teach a child to save and to show them how to be financially responsible is to give them an opportunity to do it themselves. Opening a savings and/or checking account can help prepare them for financial independence and teach them how to manage that responsibility.
- Start a Weekly Allowance. According to Fay, an allowance can be a great way for kids to practice their money skills. A weekly allowance helps instill a greater sense of responsibility and understanding about spending and saving as well as needs versus wants.
- Learn to Say No. As parents, we love nothing more than to see our kids happy; however it does children good to set boundaries and limits and, more importantly, to teach them the value of a dollar. For example, if your child wants a tablet, rather than saying yes, outline the cost, how much she has saved and how much she still needs. For example, if it costs $500 and your child only has $200 saved, she still needs to save $300 more to get it. What will she give up to earn the additional $300 to purchase the tablet? How will she come up with the money? Your child will value the item a lot more if she has to work for it.
- Invest in their future: Contribute to a 529 college savings plan or gift a Custodial IRA. One way to demonstrate the importance of saving is by doing. Don’t underestimate the potential impact of helping a child plan for long-term savings goals such as college or even retirement.
Parents Are Not ATMs: How To Teach Kids The Value Of Money
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