Teaching your kids about money can be great for you and your children. Your children get to learn valuable lessons about subjects like saving, budgeting, and earning interest, and you get a refresher course on all those important personal finance habits that may have slipped over the years. Financial experts have long lamented that personal finance isn't taught enough in schools. It’s up to parents to step in and show young people the importance of responsible money management.
Begin With the Value of Good Work.
One way to show children the importance of money management is to pay them for completing age-appropriate chores or tasks around the house. Set a value for each task: a relatively small amount for easy tasks and a little more for harder ones. When the work is voluntary, the child quickly learns that his or her own efforts alone can generate income.
Reinforce Good Saving and Spending Habits.
Have conversations about the importance of balancing saving for a future purpose with spending wisely in the present. Seeing results from smart saving and spending practices takes time. Children may be more motivated to earn money if they get to spend some on something fun right now. But if there’s a big purchase they've been wanting like a bike or a video game, encourage them to save towards that goal.
Talk About Budgeting.
Show children how much you spend each month on groceries, utility bills, the mortgage, and your retirement fund. This will give them a good idea of budgeting and all the financial intricacies that go into making a family unit work. If your family is saving up for a big purchase such as a vacation or a new car, show them the progress you're making each month. You can even set older children up with a budget of their own.
Ally Bank Is Here to Help.
Teaching kids about money is one of the most important things you can do. It prepares them for the future and gives them a great foundation for intelligent financial decisions. Often, children learn important lessons simply by watching you. Explore the smart financial options Ally Bank has to offer by visiting Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.
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