Maybe one of the best ways to avoid bankruptcy is to learn about money and financial well-being from a very young age. Even on a basic level, there are money tips for kids that when taught and reinforced over the years to come can make a big difference in their financial future.
Tips for teaching kids about money
In this post, we will go through some money tips for teaching kids about finances, starting for preschoolers and going up to kids who are a little older. If you have children — however old they are right now — we urge you to employ some of these money tips and strategies. You may even find that it helps you in your journey to a better financial future.
- Clear jar piggy bank. Many kids have piggy banks of some sort, but most are fun characters or animals. Those don’t give kids a visual of the money that is or is not inside. With a clear jar, they will see money building up and growing. Encourage them to add their coins and dollars, and talk about the value as they go in.
- Be a good example. A study by the University of Cambridge found that money habits in children are formed by the time they’re seven years old. This means that your kids are paying attention to what you do, including how you pay for things (Is it always with a credit card?), when you pay (Is this only after bills have piled up?), and how stressed out money may make you (Are you and your spouse always arguing about money?). Set a healthy example for them, and it’s more likely that will be how they conduct themselves regarding money as well.
- Make spending money tangible. Do more than tell your kids how much something costs. Let them take $5 out of their piggy bank jar, go to the store, and help them find something that costs that much or less. Have them physically hand the bill to the cashier and receive any change to put back in the jar. These simple actions will make a lasting impression, especially if they want to buy something that costs more than $5.
- Provide an allowance, but for the right reasons. Kids shouldn’t get an allowance for doing nothing, just as you shouldn’t get paid for doing nothing at your job. How much they receive should be tied to chores they do, such as emptying the dishwasher, feeding pets, and taking out the trash. This will help them understand that money must be earned, and if they do not have it, they must work for it.
- Don’t let them buy anything they want. Whether it’s with your money or their own money, teach your kids that just because you want something right this moment, they should not always buy it. Avoid impulse buys, and encourage them to think about the possible purchase for a few days and whether or not they really need that item.
- Start saving early. This can be in the form of a simple savings account at your bank, or it could be a college savings account. The sooner you start saving for your child, the better it will be for them and for you. Talk to them about this account, share the numbers with them, and don’t allow money to come out. Emphasize that the account is for the long-term, not to be spent on video games right now.
- Encourage them to get a “job.” Not a real job, of course, but once kids are in elementary school, they will probably love the idea of having a lemonade stand or doing other odd jobs for neighbors, friends, or family. Capitalize on this — keep it fun, but make it real. Set hours and job parameters for them, and make them stick to it.
When kids are young, it’s also a good time to teach them about needs vs. wants. That can be emphasized in conjunction with many of the money tips above, but be sure you talk about it specifically. Your family needs to budget for food, but you do not need to eat out every day, even though your kids may want to.
It really all comes down to talking to kids about money, starting at a young age, and leading by positive example. If helping the next generation do better with finances isn’t enough incentive for you to get your act together, we don’t know what will be!
Discover Tom Bible Law in Chattanooga, TN
If you are struggling with excessive debt and looking for a sound solution, the attorneys at Tom Bible Law, can help you explore your legal options. We have helped numerous clients from Chattanooga and throughout Tennessee and North Georgia achieve their debt relief goals by guiding them through the bankruptcy process. We work with every client personally, giving each and every bankruptcy case the time and attention it needs. We understand the financial pressures our clients are facing and work to resolve their debt problems in a favorable, cost-effective manner. Our bankruptcy lawyers have more than 80 years combined experience and are here to help. Call us today at (423) 690-7712 or drop us a note here.