You know all about different ways to achieve cheaper living, but you’re not the one you need to worry about. Your kids will also face the impact of inflation, which is why it;’s so important to teach them excellent money habits as soon as possible.
Whether your child is six or sixteen, getting them comfortable with having and spending money – without wasting it – can do wonders for their financial literacy and teach them the crucial skills required to be sensible with their funds. Whether you want to teach them the value of money, encourage them to build a strong credit rating, or stop them throwing money down the drain, here are some tips to help your kids build better money habits.
Make Them Work For It
Encouraging your kids to get a part-time job is a useful way to teach them to be better with their money. They will be able to compare their hourly wage to what they want to spend, which will make them think twice about some purchases and help them understand the true value of money.
If your child is too young to get a proper part-time job, you can still give them an allowance, especially for doing things around the house. These chores will vary depending on their age, so consider what’s appropriate and what they’re capable of doing and reward them properly.
And Give Them a Budget
However, even earning money isn’t always enough to teach them how to look after their funds. If they are still spending money like it’s going out of fashion, you can help them work out a budget. For alliances, remind them that they are receiving x-amount every week (or month), and remind them they will get no more.
This will help them reconsider some purchases as they know that when it’s gone, it’s gone. They also won’t want to owe you anything. If they’re earning money from a part-time job, sit down and consider the average amount they earn and then highlight different expenses they might have to identify which expenses are not needed.
Get Them a Bank Account
Your kids will also want (and need) a place to keep their money. They can keep their allowance in a piggy bank, but this isn’t’;t as convenient as getting a bank account. For most part-time jobs, kids will require a bank account, especially if paid with cheques or in cash.
You can look for services that offer accounts for kids under 18, and the likes of Provident State Bank have specialized accounts that are designed for high school and college-age kids. Or younger kids, you can open a bank account for them, and you’ll have complete control until they’re old enough to make a withdrawal.
Help Them Ignore Impulses
Impulse buys can catch everyone out, and if you’ve ever gone to the supermarket with your kids, you know these impulses can affect you, too. It is exciting when kids suddenly have money all to themselves, so they’re likely to spend it on whatever they see.
You should encourage them to ignore impulse buys through a few useful tactics. Ask them whether they can afford two of these items. If not, then it;’s best to ignore the impulse. You can also encourage them to wait until the end of the month and see how they still feel before pursuing the purchase again.
Develop a Saving Habit
You can ensure your kids ignore these impulses by helping them develop a spending habit. This can be tricky even for adults who have made money for years, so helping them get comfortable with putting money away each week or month will help them in the future.
You can teach them about tax percentages and other demands that they’ll need to pay eventually, so get them to put 20% of their earnings to the side whenever they get paid, as this will help them live with less and build exceptional saving habits.
Teach Them About Credit
You can also teach them all about credit and even help your kids build good credit to make it easier to make substantial purchases when they become adults. Excellent credit is required for a wide range of purchases, including cars and homes, and even phone plans will require a credit check.
While your child won’t be old enough for a credit card yet, you can show them why paying off the card is so important when they get to that point. It can be challenging to recover from terrible credit, and it greatly limits your options, so make sure you share this information.
Help Them See How Money Grows
Investments are another approach you can use to teach your kids the value and potential of money. Again, they’ll not be able to invest themselves, but they can sit with you and watch your investments grow.
Not all investments will pay off, so make sure you choose investments with good potential. There’s no need to invest in cryptocurrency and follow that trend. Instead, green energy is something that has been a popular choice for anyone looking for a safe investment.
Model Responsible Behavior
Finally, the most effective way to help your kids build the best money habits is by modeling excellent behavior. If you append, spend, spend, they will assume this is the best way to approach their earnings.
If you are careful with your money, you will pass on this habit to your child. There might be some moments where they want to splash out, which could encourage them to be impulsive when they get the chance. Eventually, though, they’ll realize you had the right idea.
Our kids are still bound to make some mistakes with their money. They might feel impulsed by their friends, or they may want to keep up with the current trends. However, as long as they don’t make a bad habit of this, you can still feel confident they know what they are doing with their money, which will help them save up enough to pay for a house, a car, and start a family.