How to Teach Your Educate Kids About Money
As parents, you are naturally concerned with helping your child develop healthy relationships with and perspectives on every facet of the big wide world. Whether we like it or not, money is central to modern human existence. Part of raising a functional, healthy, and happy individual is encouraging a responsible and balanced outlook on money.
You do not want your child to grow up to be a stingy, money-hoarding recluse nor do you want them to recklessly throw their money around in a way that is detrimental to their future security and wellbeing. Your child’s early to late teenage years are the perfect opportunity to pass down your wisdom on the topic of money and help them form a healthy relationship with their financial situation early on in life.
Introduce Them to the Basic Principles
Teenagers today tend to know a lot more about money than your generation likely did at their age – but this is, of course, not always the case. Before rushing to open a bank account for them or entrusting them with a yearly budget, introduce them to the basic building blocks of financial responsibilities.
Discuss the meaning of long-, medium-, and short-term goals and have a conversation about how you would go about planning for and implementing these. Another important concept to address is that of expected versus actual expenses. Try to introduce them to the idea of interest and explore how this would influence what type of savings account they would want to open.
Although your teen likely does not have a job so they cannot sign up to play real money pokies online as you can, it is worth discussing tax and the way in which tax relates to a salary. These are just a few ideas to inspire you to initiate a healthy conversation about money with your teens. We are sure there is a multitude of other bases that you could cover in addition to the aforementioned topics.
Involve Them in Financial Discussions
One of the first steps to teaching your children about money is to include them in a frank and positive conversation. Even if they do not understand precisely what you are speaking about, involving them in family conversations about finances will introduce them to the importance of open communication, planning, and accountability.
Be sure to maintain an optimistic, realistic, and non-confrontational tone so as to lay the foundation for healthy perceptions of money. You might even want to ask for their assistance with shopping so that they come to understand the value of food and household items.
Bank Accounts and Budgeting
Once you feel you have explored the basics of financial responsibility it might be worth helping your teen open up their own bank account. Even if they already have one, they might want to switch banks in search of a better interest rate or lower monthly fees. Once they have established their own bank account, you can ask them to create a budget and follow up with them periodically regarding whether or not the budget is working.