By: Brittany Komorowski, CFP®, EA
When I was a kid, I firmly believed the ATM machine just spit out money whenever you needed it. Boy was I in for a surprise when I learned the truth! Money is an integral part of society, yet there is very little curriculum covering most of it in schools. Instead it adds yet another item to a parent’s plate to teach their kids. While you may feel you are not the best one to be teaching your child about finance, trust me, you can show them simple lessons that will impact their lives forever. Below I’ve laid out five simple ideas to help shape your child’s mindset around money. Why not get started with the glorious summer vacation here? I think it is an opportune time to put your child on the money trajectory for success!
- Start the discussion! Don’t let money become a taboo topic in your home or while you’re out and about chauffeuring them from place to place. I encourage you to have an open honest dialogue with your children. Begin answering financial questions with the most transparency possible, it can help your child start to understand the way money works.
- Start a clear savings jar! While a piggy bank is a great idea, a clear jar provides a visual the child can see. Show them how it grows by them saving their money instead of spending it. This will be a great foundation for explaining banks and interest to them. It can also be used for depositing into a bank account once they are old enough.
- Teach them that money is finite and there are choices to make! One of the hardest lessons to learn is that you cannot get it all, for money doesn’t grow on trees. Encourage them to prioritize what they would like to buy and mention charging a fee if they don’t have enough money yet. They will learn the importance of saving and also of waiting. Hopefully this will lay a great foundation for them to avoid credit card debt in the future.
- Let them earn money! By paying the child for doing household chores or tasks, they begin to understand the value of money. They will understand that work has
afinancial value. As they get older, you can pay bonuses for going the extra mile and discuss raises and taxes like we share in the real world.
- Teach them about giving! Children can begin to understand what it means to give whether it be through money or their time. I encourage you to have them pick their favorite charity and give a little. They will learn what it means to help others and also see the positive effect it has.
Liberty Financial Group, Inc