You want the best for your kids. This doesn’t mean you want them to have the latest gadgets or clothes. It means that you care about them being safe and secure. You also want to lay a solid foundation for them to succeed. One of the most important lessons that you can teach your children is about money.

 

Even if you’re not teaching them about money, they will still learn important lessons. If you want to play a significant role in shaping their values, feelings, and thinking about money, then you need to instill financial literacy in them early.

 

Teach the Basics Early

When your kids are old enough, you should introduce them to cash and coins. Explain how money works and show them how it is used. This is more effective if they can see how it works.

 

Emphasize Saving

Early in their financial interactions, your kids will likely see you using money to purchase things for them. It’s important to teach them that money is not just for spending. It’s also important to regularly teach them how to save.

 

Give your kids a savings jar or a piggy bank so they can easily deposit and manage their own money. Then, use short messages to encourage them.

 

Giving your kids the opportunity to save more can be a great way to encourage them. You can also encourage them to set goals by matching the amount they save. If they’re old enough to move money from their savings bank to a real one, they can use services such as Greenlight and FamZoo. These prepaid debit cards allow parents to transfer their money to their kids at their chosen rate.

 

Demonstrate Earning Money

Having money can help kids develop the necessary skills to make informed financial decisions. However, it’s also important to encourage them to earn their allowance by performing chores. Renick noted that everyone values money differently.

 

Model Charity

One of the most important reasons why it’s important for parents to teach their kids about financial matters is because they can share their values with them. Giving to others can also be a great way to instill a certain value in them.

 

Ask your kids to plan their giving by identifying the causes and groups they’d like to support. They can also check out the ratings of various organizations on Charity Navigator.org.

 

Set a Good Example

Besides the lessons about money that you’ll teach your kids, it’s also important to talk about money with them in a variety of ways. For instance, if you’re complaining about having to spend a lot of money on certain items but then allow your kids to go on a shopping spree, you’re sending mixed messages.

 

Make sure that you model the behaviors that your children will adopt as they start to handle money. You must instill good saving and spending habits in your children so that they will be able to make informed decisions when it comes to their finances. You must also practice what you preach and teach them consistent lessons about money. It can take a long time to teach your kids about personal finance, but by putting in the effort and communicating a clear message about money, you can make a significant impact.