There are simple ways you can start setting your child up for early financial success.
The power of earning
Allow your child to do extra chores, babysit or start a lemonade stand or other business venture for more spending money. This is a great way to show kids the value of money at an early age.
Be an example
Whether reviewing and paying the utility bill or making a transfer to your savings account, let your teen see how you handle the family’s finances. Do more than talk about money; show examples. When children see financial management first-hand, they’re more likely to pay attention and learn from it.
As your child gets older, add new age-appropriate financial responsibilities. An increase in his allowance, or a part-time job can help him cover additional expenses, like gas or new basketball shoes.
Be understanding of mishaps
Your child is bound to overspend or not budget correctly once or twice. Let this be a learning opportunity by sitting down with him to make a better plan.
Skills for independence
Once your child is old enough to work and drive, she needs more financial knowledge. Teach her how to decipher her paycheck, how credit works, how to make bigger purchases (like a car) and the importance of auto insurance (and how it works). As she approaches high school graduation, include lessons about student loan debt, reducing college costs, the importance of her credit score and basics on investing.
Whether your child is a tot or teen, it’s never too early to help set your child on the path for financial success. Slowly teaching them smart financial practices will help give them the skills they need to be successful with their money.