By Evan Fischer
Sponsored Guest Contributor
There’s no doubt about it.
Hands down, one of the absolute best things that a parent can ever do for their child is to teach them how to be responsible with their money. The sooner your kids can learn about the importance of saving and making future plans for their income, the better off their life will be as adults. In fact, there are several studies to support the fact that one of the main reasons why so many young adults are in debt is because they don’t fully understand how to manage their money.
If you have a child and you’re wondering how you can teach them about the importance of the value of the dollar, especially when it comes to saving money, here are five easy tips that can do today in hopes of sparing your children a lifetime of financial stress and debt.
Have Them Earn an Allowance
We’ve all heard the saying that you appreciate things more when you have to work for them. This doesn’t just apply to adults. Rather than simply giving your child $20 at the end of each week, give them a couple of “jobs” to do (outside of their chores) around the house so that they can learn the importance of earning a dollar. This simple act of rewarding them for efforts to help the family around the house will help to instill a good work ethic and also pride in a job well done.
Encourage Them to Save for What They Want
We live in a culture that focuses of instant gratification. In the long run, this is not helpful or healthy. Children definitely need to learn the difference between getting what you want immediately and waiting until it’s the best time to have it. When your children set their sights on a new outfit or a new toy, rather than simply buying it for them, encourage them to save up their money and purchase it themselves, or at least consider going half on the item. If they want it bad enough, they will do what is required to get it. If they are impatient and move on to something else, well, that is a cheap and quick lesson in making wise purchases instead of impulsive ones.
Get Them Their Own Savings Account
Children tend to get more excited about things when they are treated like young adults. There’s nothing more adult than a trip to the bank to do business. Open a savings account for them, but make sure that they go with you so that the bank representative can explain to them the options with certain accounts, the interest that they can earn by saving, and other benefits that are available. If you have a very young child, then purchase them a piggy bank to put their coins in. When it gets full, count it up, and swap the pennies, dimes and quarters for dollar bills so that they can see how money that you can “jingle” can be turned into money that you can fold.
Play the “Want vs. Need” Game
Sadly, there is no game available today with this title, meaning you will need to come up with your own creative ways for your kids to learn the difference between what is a want and what is a need. For instance, if they come to you about getting the latest iPhone, ask them to share with you if it is a want or a need and to provide the reasons to support their point of view. The sooner that they learn the value of food, water, and shelter versus iPods, candy, and a new video game, the better off they will be. Knowing the difference between a want and a need is a value statement. By learning early on the real value of things, they will make better choices.
Speak to Your Children About Your Hard Lessons Learned
If you have older children (especially if they are preparing to go to off to college in the next couple of years), it is imperative that you share with them some of the things that you had to learn the hard way when it comes to finances. If you once ended up in credit card debt, tell them, even though it might be embarrassing for you. If you bought a car that you couldn’t afford, tell them how you could barely pay for the gas to even drive it. If you kept getting your cell phone cut off because you didn’t pay your bill on time, share with them the importance of shopping for good payment plans and keeping up with their billing schedules. Goodness, go the extra step and help them find good deals and discounts like this Verizon promo code.
Long story short, don’t be so embarrassed about your past. It has made you who you are, today. Use what you have learned based on your past experiences to educate your children so that they might avoid making the same mistakes in their future.
About the Author:
Evan Fischer is a freelance writer and part-time student at California Lutheran University in Thousand Oaks, California. He enjoys writing about the latest tech news for a variety of companies and discovering new and innovative gadgets.