Do you teach your kids about finances?
Seeing as we’ve just come through tax season I’ve got money on the brain. I really want to raise my children to be good stewards of their money and to be equipped to make great choices with their finances.
Sometimes we think that the teen years are a good time to start teaching kids about money, but I’d argue that even kids as young as three can start grasping some of the basic principles that make for good stewards of money.
I’d love to break down some of the key concepts that we are working to instil in our kids right now.
Money does not grow on trees: Our kids need to understand very early on that money does not just appear and there isn’t an infinite amount of it. We don’t talk numbers with our kids but we explain to them where our money comes from. We work for it. Sometimes money can also come from a gift or from selling something you own. Our kids also know that we grow our money by investing it.
You can’t have it all: Every day we make choices. Making choices is integral to handling money well. We cannot have it all. It’s a great idea to involve kids in these choices. For example, “We are going away for the weekend and we can either go to the trampoline park or we can go see a movie but it’s not in our budget to do both. What do you choose?”
Understanding the difference between needs and wants is also important. Needs have to come before wants. On a side note, I also like to use the phrase “It’s not in our budget” rather than “We can’t afford that.” Typically we can afford that but we choose not to spend our money on that.
Pay yourself first: Putting away savings first is a way to pay yourself and will allow you to spend on better things later as well as protect yourself from unexpected circumstances.
Creating good financial habits will pay off in great rewards.
