So many of us struggle with finances as we enter adulthood. When we become parents, we don’t always know the best tools to teach our kids financial responsibility, because we never learned it ourselves. It’s never too late to steer the whole family toward a more responsible financial future, though. All it takes is a few simple tools to help get you there.
A Modest Allowance
Children understand what money is long before many of us may imagine, so if you think your child is too young for an allowance, you may want to reconsider. As soon as you begin bringing your child to grocery stores, restaurants, gas stations and toy stores, he or she begins to see cash or credit cards exchanged for goods and services. It is only a matter of time before the young mind begins to understand the role of money in the world. At this point, allowing your child to handle a small amount of money is advisable.
The key is to provide your children with a modest allowance and instill a sense of responsibility along with that money. Some parents provide an allowance in exchange for doing chores, such as washing dishes, taking out the trash, cleaning, running errands or walking the dog. Other parents provide children with a (small) set portion of their income, with the understanding that the children will be responsible to pay for their own entertainment, activities and other non-essential purchases. The latter might not work with younger kids, however.
Start Saving in a Jar
When your kids are young, you can begin teaching them about the importance of saving by using simple glass jars. You and your child can decorate different jars for spending, saving and other purposes, such as giving away to charity, church or any special purpose for which you’re setting money aside. Then, whenever your child gets a gift or receives allowance for a chore, he or she can put some into each jar.
Open a Savings Account
As soon as your kids are old enough, in your opinion, it’s a good idea to have them open a savings account at a local bank in which to put their money away. The right time will probably be sometime after they’ve been receiving an allowance for a while. Then, when they get their first part-time job, they’ll be ready for the responsibilities of a checking account, and much more.