The best way to teach your kids about money is by example. If you practice good spending and saving habits now, your children may do the same as they get older.
- Lead by example when it comes to teaching kids about money, which includes getting rid of your credit card debt.
- Use fake money or an allowance to teach young kids how to save and spend money before they are adults.
- Encourage your kids to save money now so they will already have an emergency fund once they start paying bills.
The goal is to teach your kids about money so that they don’t get into debt when they’re older. You can use your own financial decisions to teach your kids about money or you can provide them with an allowance to practice on their own. Either way, practicing good money habits now with your kids may be able to keep them out of financial difficulty in the future.
If your finances are not in good health, use your kids as inspiration to get out of debt and improve your finances. Create a budget if you haven’t already and consider having your kids create one too, if appropriate. If you decide to provide a weekly or monthly allowance for your kids, make sure to update your budget with the new line item.
If you cannot afford to give your kids a weekly or even monthly allowance, try other ways to teach them a healthy relationship with money. For example, use holidays or birthdays when they may receive money as presents to teach them how to spend or save wisely.
Teach Kids About Spending Money
Keep your lessons age-appropriate when teaching your kids about spending money. Teenagers may need more guidance than a younger child, for example, especially if they have a part-time job.
- If possible, provide opportunities for your children to practice making good money choices. When you go on vacation, give your kids a budget to stick to when it comes to buying souvenirs.
- Allow older kids to spend their own money on extra things like accessories for their cars or new clothes. Giving them opportunities to practice smart spending through budgeting will help them when they are older with more bills to pay.
- If you can’t afford an allowance, use your imagination! Allow your kids to practice at home with fake money. While you can use fake items to purchase too, you can also allow your kids to earn money for real prizes such as staying up 15 minutes later.
- Involve your kids in your own spending habits. This can help them understand how to budget for a real household when they are older.
If your kid goes a little overboard with spending money, make it into a lesson. Help them figure out how to make better choices the next time they spend money.
Teach Kids About Saving Money
An emergency fund or a savings account can help provide the funding for unexpected bills. While kids won’t necessarily need an emergency fund now, getting into the habit of saving some of their income can be helpful in the future.
- Allow your kids to save up for toys or activities they would like to try. This could also help your kids understand the value of money.
- Suggest to your kids that they put a percentage of their allowance or gift money into savings consistently. They can later use that same percentage when they get a job and should be putting aside savings.
- Consider setting up a savings account at a bank for your children now that they can use when they are an adult. If they’re lucky, they could have a head start on an emergency fund to help cover unexpected bills in the future.
- Allow your kids to be involved in your savings as well. Let them see how much you save each month and they may be encouraged to do the same.
Lead by example when it comes to good financial health by getting professional help when you need it. If your credit card debt is overwhelming, ClearOne Advantage can help you get your finances in order. Contact a ClearOne Certified Debt Specialist at 866-481-1597 today to discuss your situation, explore your best debt relief options, and get a free savings estimate.
The information provided is for informational purposes only and is not intended to provide legal or financial advice. Clear One Advantage is not a lender, credit repair or consumer credit counseling company. Clear One Advantage doesn’t provide credit advice. Please consult a certified financial advisor for individual credit and lending advice.