Remember how hard entering the real world is as an adult? Actively teaching your kids skills you wish someone had shown you will make life a little easier from the start. One of the most essential skills to teach is how to spend money and, more importantly, how to save it.
So This is Growing Up!
The transition from kid to adult hits you like a ton of bricks. Everyone can remember when they left the nest. Trying to shuffle through the information our parents taught us through the years. Then, we try to put the advice to use. We can also remember all the times we tried something new and wondered why had no one taught about this in school? Talking to your kids about life and money matters now will help prepare them for the future. They might roll their eyes, but they won’t forget these lessons. Always lead by example. Remember, your kids will watch your behavior and are sure to mimic it. Explain to your kids the decisions you are making and practice good spending habits when possible, and when not possible, remind them to do as you say, not as you do.
Find a Penny Pick it Up
The information you pass on to your children will be invaluable to them. You don’t have to sit them down and lecture, but when the opportunity presents itself, recognize it so you can give them advice or explain what you do. For example, when you go to the bank, this is an excellent opportunity to explain savings and checking accounts. Explain the difference to them, even allow them to set up an account of their own. This is an easy and fun way to show your kids where they can keep their money. This also opens up the opportunity to explain interest and the benefits of different banking styles, such as big banks vs. credit unions.
Another great opportunity to talk to your kids is when they reach the age, they can get a part-time job, encourage your kids to work when they have the time. They will have the rest of their lives to work. Use the opportunity for them to take small expenses off your hands, like luxuries, going to the movies, or buying a new pair of headphones. Two weeks after they start working, they will have a paycheck; that checking account is useful now! Take time to show them the different fields on a check stub, hours, wage, total income, and taxes. This will help them to see that you don’t get every penny you earn in your pocket.
This is also a great opportunity to explain the importance of saving. Make sure you give them some advice on saving, help them find a goal to save for, and get them started saving towards it. This part-time income can also be a great way to introduce tax preparation. Whether they can file for themselves or you can still claim them on your taxes, they can take part in the tax filing process. Show your kids where they can go to do their taxes, explain they have to do it every year, and the consequences of not doing it. Monkey see, monkey do
While talking to your kids about money is important, most of their habits are going to be formed from watching you. It’s a fact that when you have kids, you are always being watched. Your kids will notice when you make thrifty decisions, like when you drive a block out of your way to fill your gas tank to save ten cents per gallon. Or when you buy treats at the grocery store if they are on sale. They will also notice if you justify large shopping sprees with “the price we pay for beauty” or if you always go out to eat over making food at home. Practicing restraint is good for your wallet, and you are also teaching your kids a valuable lesson. Don’t be afraid to point out when you know your spending habits are excessive, but you can afford it because of your budget and save your money to splurge a little; every purchase can be a learning experience for your kids.
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