As parents, we want our children to have everything they need, including money. But sometimes, it can be challenging to teach our children about finance. Fortunately, there are plenty of ways to help them learn about this critical topic. Let’s explore some tips and tricks to help your child learn how to save money wisely and build a healthy financial foundation.
Set an Example
Your children see and hear a lot from you, and they take your financial habits to heart. If you want your children to be savvy money makers in the future, you must set a good example. This means being disciplined with your money, setting sensible financial goals, and sticking to them no matter what.
Give Them Chores To Earn Extra Pocket Money
One of the best ways to help your children learn about money is by giving them chores around the house they can turn into earnings. Tasks such as washing the dishes, taking care of the pets, or doing yard work can be turned into additional income-generating opportunities for your children. This way, they’ll be learning about personal finance in a fun and engaging way.
Open a Savings Account
A study by Bankrate.com shows that children who open a bank account before age 18 have a 30% higher chance of having a stable financial future. It teaches them the importance of budgeting and setting aside money for long-term goals, such as buying a vehicle. Many financial institutions offer bank accounts for children, so compare your options when deciding for your child.
Remind your child that more savings means a larger down payment on a house, which is the amount paid upfront when purchasing a home. A sizable down payment can result in lower interest rates, and can range between 3.5% to 20% depending on loan type.
Play Money-related Games and Activities
Savvy money makers are not born overnight; they are taught through deliberate and disciplined practice. One way to help your child develop these skills is to play money-related games and activities together. Doing this can help them learn about money in a fun way and build a strong foundation for financial literacy.
Expose Them To Entrepreneurial Opportunities
Exposure to entrepreneurship helps foster a strong work ethic, encourages risk-taking, and builds essential skills such as financial, problem-solving, teamwork, and leadership. By exposing your child to opportunities in the early stages of their life by teaching them how to start their own business, they can also learn about finance options, including credit cards, bank loans, friendly loans, and crowdfunding.
Open a Stock Portfolio
Opening a stock portfolio for your child can teach them the importance of diversification, risk management, and market analysis. By getting your children involved in the stock market at an early age, you can help them develop a keen interest in financial matters and equip them with the skills and knowledge necessary to manage their finances in the future.
It’s important to model investing behaviours you want to see in your children. That includes things like research, patience, and determining value. Additionally, you want to teach them how to invest their time as well. Working on updates to your house, for example, is a great investment of your time to add value to your home. Even small updates, as they accumulate, can improve the appraisal value of one’s property.
Financial Education for Life
In today’s world, it’s more important than ever for children to learn how to manage their finances wisely. By being exposed to money matters in a fun and educational way, they can learn how to build a solid financial foundation from an early age.
For more information on how you can help your children learn and develop savvy money habits, visit Reaching Aspiration today.
A guest post by Hazel Bridges
Hazel Bridges is the creator of AgingWellness.org, a website that aims to provide health and wellness resources for aging seniors. She’s a breast cancer survivor. She challenges herself to live life to the fullest and inspire others to do so as well.