Teaching Kids Financial Responsibility
It’s important to teach your kids how to be financially responsible at a young age. According to a study by the University of Cambridge, it was found that money habits in children are formed by the time they’re seven years old.
We’ve all heard the saying “little eyes are watching you.” If we want our kids to learn good money habits, we must set a healthy example for them at a young age.
A few ways to teach them financial responsibility are:
- Go over a basic monthly budget with them. Explain how monthly bills work, and the importance of paying bills on time. After the bills are paid, list all of your other necessary monthly expenses, such as groceries and gas. It’s important to show them the basics even if each month looks a little different.
- Take your kid(s) grocery shopping. Remember to use the budget that you’ve established for groceries. As you are shopping for items on your list, they will see how much the items cost and how quickly things add up.
- If you have older kids, give them real money to manage. Some parents do this by giving them an allowance or you can just give them money and they can start out by paying for shopping trips or simple activities. Nothing beats real-life lessons. Set an amount and see how they do with it.
- Discuss the importance of saving money. For older kids, have them open a bank account and start saving that way. For smaller children experts recommend using clear jars to put money in so that they can physically see the savings stacking up.
- Teach them about giving back to the community. This can be to an organization, a good cause, or your church. No matter what you choose to give to, the feeling you get when you give to others in need is invaluable.
Whether your kids are 5 or 25, it’s never too early, or too late, to help build financial confidence and encourage financial responsibility.