It’s never too early to start teaching your children the importance of fiscal responsibility. The earlier you instill these values in them, the better prepared they’ll be to deal with the real world as adults, and the less likely they’ll be to go into debt or make other poor financial decisions later on in life. Raise responsible kids financially isn’t always easy, but it’s also not impossible.
The tips in this article will help you turn your children into independent, responsible adults who take care of their finances rather than depending on you to do it for them. To start, remember that you are the parent, and you set the example when it comes to spending and saving money. This means not charging everything you can to your credit card and paying off the balance every month; instead, make sure you pay your bills on time and don’t spend more than you earn every month.
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1) Don’t give your children everything they want
Living beyond your means is one of the quickest ways to raise a financially irresponsible adult. Many parents in debt report that they didn’t think their kids would amount to much anyway, so they weren’t too concerned about providing them with a comfortable upbringing. If you want to raise fiscally responsible kids, consider not giving your children everything they ask for.
2) Watch What You Spend In Front Of Them
Even when you’re making small purchases, paying with plastic will seem normal to your kids. If you want them to learn good spending habits, put an end to your bad ones and pay cash for as many everyday items as possible. Set a limit on what they can buy at any given time to see that real money doesn’t just appear from thin air. And don’t forget about allowance: Giving your kids regular payments—even if it’s only $5 or $10 per week—will help them understand how saving works. Even better? Have them do chores around the house in exchange for their allowance.
3) Teach Them About Saving Early
Whether your child is five or fifteen, it’s never too early to teach him or her about saving. The sooner you begin saving, say, experts, the sooner you can afford to pamper yourself. If they know they’re getting a gift (maybe an investment) in it, they will be much more motivated. It’s not just about telling them what to do, but showing them. For example, if you want them to save money for college instead of buying lunch every day, show them how and why by investing some of your own money into a college fund account with their name on it. Then explain that every time they buy lunch with their friends at school instead of bringing their food from home, that money is going towards their future education.
4) Show Them The Value Of Hard Work
You don’t have to be rich or famous for your kids to learn financial responsibility. Explain to them that paystubs are part of their reality, especially if they are in an earning phase of life and desire to buy things they can’t afford. Pay stubs show them what it’s like to work hard, so they know how hard they need to work at whatever job they get.
When you get paid, your pay stub shows you exactly what you earned and any deductions taken out by your employer. Your child will learn that there is no such thing as free money—that everything comes with a price tag—and it’s up to him or her to make sure he/she is earning enough money to pay those bills every month.
5) Help them start a side hustle
Help your kids understand that everyone makes their path and that they don’t have to take a job straight out of college or high school. As teens, they can start small businesses or begin freelance work. Encourage them to talk with friends who work as remote workers (i.e., independent contractors). This will show them that they can earn an income without quitting school and getting a full-time job.
6) Engage In Family Projects Together
The more remote workers you have in your family, it might mean a couple of fewer arguments about your kids being gone all week, so why should I help out with these chores around here? The general rule is that every contributing member makes his or her contribution and gets back an equal share.
7) Encourage community service activities
Help your children start thinking about their giving habits early by volunteering as a family. Look for opportunities that fit your family’s interests and schedule, such as community service projects like cleaning up local parks or reading to senior citizens at nursing homes. Encourage your kids’ teachers and coaches to get involved with service-oriented organizations in your community, too. By making giving part of your daily routine, you can help instill an attitude of generosity from an early age.
8) Give Them Simple Jobs Around The House
As they get older, giving them small jobs around the house can be a good way to teach them what being financially responsible looks like. This is especially true if you set some ground rules that allow them to spend or save their own money. For example, when my kids do a few chores, I’ll give them $5.
9) Take Care Of Their Needs First And Then Yours
They need food, clothes, and a place to sleep. They don’t need fancy cars and designer clothes. If you get something for yourself but forget to buy what they want or need, don’t blame them when they complain later. Set an example: If you want your kids to learn about handling money, show them responsibly handling your money. Give them an allowance: Giving kids an allowance at a young age will help them understand the value of money from early on.
10) Teach Them What Credit Cards Are And How To Use It Responsibly.
Teach them that credit cards are a loan and that if they’re going to use them, they need to pay them off in full at the end of every month. Explain why using your credit card is different from using cash: For example, if you spend $100 with a credit card and don’t pay it off immediately, you might be charged more in interest than if you had spent $100 in cash.