Financial lessons are an important part of a child’s education. From simple budgets to savings goals, these tips will help your whole family be smarter about finances!
Some of the hardest life lessons revolve around money, and with so many people facing unemployment or reduced wages due to the COVID-19 pandemic, it’s more important than ever to give your children a good financial foundation.
While you might have extra time to homeschool, use this opportunity to make your kids fiscally aware. Instead of waiting until their teenage years, you can get started on teaching your kids about money management now! Whether you draw up a budget or give them an allowance, there are many important money tips for young people.
Here are five great ways to help you and your family make fiscally-wise decisions.
1. Money Doesn’t Grow on Trees.
“Money doesn’t grow on trees” might be one of the most basic money tips out there! However, given all the things there are to buy, it can be hard for kids to realize money is earned! ATMs push out money and credit cards simply provide it, so it’s important to stress the value of money. Instead of letting the time for financial lessons go by, ensure you teach your children that money is a limited resource.
Teach them about what debt is– when you spend more money than you make, you’ll go into debt. Sometimes paying money These days, they’re probably more aware of that fact than ever!
2. Saving Money Is Important!
Whether it’s a mini-tablet or the latest toy, money can be easy come easy go for many kids. Fortunately, once your kids are earning an allowance you can teach them all about the virtues of saving. To encourage this habit, you may even want to match their cash savings on a monthly basis for motivation. Teaching them the difference between wants and needs is one of the best money tips there is! It will also help them understand the benefits of investment.
3. Set a Budget for Financial Stability
Even for adults, the word “budget” can be a pretty scary one. However, you and your family can take a lot of fear out of it by discussing money tips for families. If you’re crafting a family budget, plan a night with the kids and go over budget basics. Talk to your kids about having an income. Not only will your income cover basic expenses, from your mortgage to groceries, but adding in money for things like an emergency fund, life insurance, and giving might also be part of your family budget.
By determining needs and wants, and figuring out what’s left, you’ll know what to prioritize as a family. While it’s unlikely you’ll be charging your young ones rent, you can still have them create their own budgets. The budget discussions might also be a good time to bring up principles like taxes, which can take a big chunk out of your income.
4. Credit Cards Are Not Free Money.
Credit cards are an important rite of passage when it comes to being a financial adult. However, if they’re not used properly they can be the biggest money mistake of all. While you won’t want your kids to abstain from credit completely, teach them about the downsides of credit. It’s best if you don’t use them to buy anything you can’t afford. And it’s also important that they know how late payments and interest charges can work against them. If they know how to use it, having a credit card doesn’t have to be a poor decision.
5. Use Real-Life Activities to Teach Your Kids About Money.
It’s one thing to talk to your kids about the rules of money. But, one of the best ways to get them to understand is to put their learning into action! You can even share your own money tips online through FamilyApp.
Shop for Groceries
Whether you want to play at home or the grocery store, have your kids do some shopping! They can even make a grocery list and decide what they need. This will give them a sense of how much things cost in the real world and the value of money.
This process can be easier than ever if you’re using an online service for groceries. They can instantly see the total cost of all the items in the cart.
Play Around with Investing
You don’t have to use actual money for your kids to learn about investing, but there are several types of online stock market games they can play to get a basic understanding of investing. Is it better to take a big risk with your money? Or is it better to diversify your portfolio over multiple stocks?
Create a Personal Budget
When starting out, your children don’t have to have a budget that balances out. But that doesn’t mean they can’t get some learning from writing it up. And, this is one of the best money tips for college students who will need to figure out their finances!
Being financially illiterate in our culture can be quite common. However, giving your children the tools for financial success is key to their development. Do you have some money tips for 2020 to share with other parents? Or extra ways to save money during COVID-19? Let us know in our comments! Whether they’re getting an allowance or already savings’ superstars, there are many great ways for kids to learn about money.