Tips for Teaching Your Kids to Be Financially Responsible

Today I’m going over some great tips for introducing your kids to money and the concept of financial responsibility.

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Teaching kids financial responsibility is incredibly important. Doing it now will create the building blocks they’ll need to be financially responsible later in life.

There are some great tips for getting your kids on the right track to understanding financial responsibility that I want to share you with.

First, pay an allowance. Kids could have a difficult time grasping where money comes from if they have none of their own. Earning money around the house for doing chores is a great way for them to become familiar with having their own finances. Before paying, sit down and set expectations such as what chores need to be done, what the timelines are, what amount of money will be paid for each chore, and when payday is. This will not only build their work ethic, but show them that money is earned and not a gift. Also, make sure to teach them that everyone must pitch in to keep a house running smoothly, and therefore not every chore will come with a payment.

Introduce them to the concept of saving. For every dollar earned, 20% to 30% should be put away for the future. You could have them save for a big purchase, like a bike, or establish their own savings account. You can even have them decorate their own jar to act as a savings bank. Once a month, sit down with your kids and count how much money they have deposited into the jar and go over their total with them.

Be consistent with your lessons and your kids will be well on their way to becoming financially responsible adults.

When grocery shopping, ask your kids to help you compare prices, brands, and sales. Have them keep a tally and try to guess the total purchase price at checkout.

Once they have a good sense of the concept of money, give them a challenge. If they need new school clothes, give them money or a credit card to purchase those clothes on their own. You of course can guide them with what to buy, just make sure they are paying attention to how many items they can purchase within their budget. This way, they’ll learn how to make smart purchases and begin to understand the way credit works.

It’s incredibly important that they learn how to handle money that isn’t necessarily in the form of cash, as today many transactions are done electronically.

Never give in when they ask for exceptions to the rules. Be consistent with your lessons and your kids will be well on their way to becoming financially responsible adults.

If you have any questions about this topic, are looking to buy or sell a home, or have any other questions about real estate, feel free to give me a call or send me an email. I look forward to hearing from you!