In today’s consumer-driven society, it can be all too easy to raise entitled children with no idea how to properly handle money. Unfortunately, this often leads to young adults who dig themselves into financial holes that are nearly impossible to get out of.
Since nobody wants to see their child in a bad situation, it is crucial that all parents begin teaching their little ones the value of a dollar and how to manage their green as early on as possible. Therefore, if you have a young child at home, you may want to jump on the “early financial training” bandwagon and start implementing some of the ideas below.
Leave them Wanting More
Every child has wants, and honestly, there is absolutely no reason why they shouldn’t have at least some of those wants fulfilled—provided it’s financially feasible, of course. However, no person needs to have each and every thing they desire.
Giving into the majority of your little one’s requests is a surefire way to set them up for disappointment in the future when they must fulfill all of their own needs and realize they can no longer have everything they desire. Not only that, but teaching kids that they can and/or should have whatever they like when they’re young is likely to send them spiraling into debt as adults, when things like credit cards and loans become available to tempt them.
Seek Out Exposure
If your kids come from a financially stable household and are surrounded by people of the same financial status, it is likely they have no idea what it means to go without. By arranging for your child to be exposed to people living on the other end of the financial spectrum, you can help them see just how fortunate they truly are, despite not having every tiny want fulfilled.
These kinds of encounters can be arranged quite easily by scheduling a volunteer visit at the local food bank, making a point of visiting playgrounds in a part of town where those with less may play, or even enrolling your child in a more financially diverse school.
Teach the Importance of Saving
By showing your child the power of saving at an early age, he or she will be more likely to continue setting money aside as they grow older. To do this, simply purchase a small bank for your child and insist that they save a certain percentage of every dollar they earn. Make it a game by setting a fun, long-term goal for the child, such as a fun family outing.
Allow them to be involved by having them find percentages, helping them set end dates for projects, and having them keep charts on what they’ve saved and what they still need to earn.
Insist that All Money is Earned
Nobody is entitled to weekly income. This is just as true for your child as it is for yourself. You can help your kids understand this fact by insisting that they earn all the money that goes into their piggy banks.
Regular chores can be one way of giving your children the opportunity to earn money, but it isn’t necessarily the best way. Instead, paying your young wage-earners to do tasks outside of their regular chores is a great lesson for all: Everyone has chores, but extra hard work will pay off.
Additionally, encouraging tiny entrepreneurs to offer services to neighbors is a perfect way to instill a business-driven mindset in your kids.
Place Value on Experiences
As mentioned before, we live in a very consumer-driven society. Exposure to this type of mindset can lead children to become fixated on owning material things, whether or not they truly need the items in question. This is the first step on the road to credit card debt, and is not a good way to start a healthy relationship with money.
Because a fixation on material items can set kids up for a financially insecure future, it is best to make an effort to place value on other things. Family, friends, and fulfilling life experiences are all valuable parts of life that cost nothing. Be sure to drive this point home by regularly spending time with family and friends, and making fun experiences a normal part of your day-to-day life.
By using the tips above, you are sure to put your kids on the path to financial success!
Looking for ways to help your children see the value of experiences while also giving them to opportunity to befriend like-minded individuals? Check out the class offerings right here at The Loop.