We all want to raise financially responsible kids who will one day grow up to be money-savvy adults with a healthy approach to things like budgeting and investing.
Grown-up life is complicated after all, and you never know when an unexpected fee will be thrown your way. It could be anything from a freak accident and a trip to the elbow surgeon, to a sudden fine for something you could barely have predicted.
At the same time, we don’t want to make our kids cynical or overly-materialistic or to interrupt their innocent years with too much of a hard-nosed business-like approach to parenting.
Luckily, teaching your kids financial responsibility doesn’t have to be difficult, horrible, or cynical. Here are a few simple (and fun) tips you can implement today that can sow the seeds for positive financial thinking down the line.
Give them a piggy bank
The start of any child’s relationship with money should be a piggy bank. Not only do they cater to the naturally squirrel-like side we all have, which likes collecting, accumulating, and counting things, but they’ll lay the foundation from the outset that money is something to be saved, not just casually gained and thrown around.
Get your kid a piggy bank they’ll enjoy using – maybe one in the shape of an animal they’re fond of, or transparent so that they can see their savings build up in real time. This will serve as a cornerstone in teaching them about deferred gratification.
Give them the option of doing extra chores for pocket money
After getting your child a piggy bank, the next logical step is to give them something to put in it. There are different approaches to this, with a couple of common ones being to just give them a weekly allowance, or to pay them for their standard household chores.
The problem is a weekly allowance gets your child used to expecting money without having to work for it. And paying them for their chores gets them thinking they’re only doing them for money – not as a duty.
Instead, make a list of extra chores that you wouldn’t normally ask your child to do, but that you’d be willing to pay them for. An example could be taking out the trash, or watering the plants. Put these on a list and stick it on the fridge. This way, whether or not they earn money (or do the extra work) is entirely in their hands.
This imparts some valuable lessons about autonomy and cause-and-effect.
Give them opportunities to spend their money
Money’s not much use without things to spend it on.
The best way to let your child spend their money responsibly is to keep gifts like toys and games, and sweet treats, for special occasions, and give your child the option to buy their own in between.
Of course, you’ll want to set some limits here. Talk to your child often about what toys and treats they’ve got their eye on, and agree on which ones you’ll allow them to spend their money on. When they’re ready, you can take them shopping.
This will not only encourage your child to take the initiative but will also teach them lessons about budgeting and deferring gratification. They’ll quickly learn that if they spend all their money on treats, they have less for that new game they were eyeing up.
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