It’s back-to-school season, which means it might be a good idea for parents to think about something their kids won’t be learning in a classroom this year: how to manage money.
While there has been a growing movement in some states to include financial literacy as a high school graduation requirement, most kids head into adulthood without a good understanding of money or a baseline for good financial habits. And finance is a taboo topic for many parents because they don’t want their kids to worry about money or get a distorted view of the family’s wealth.
Our advice: start small. Here are three easy ways parents can teach your children the value of a dollar and start them on a path towards a greater Return on Life.
1. Let kids help budget for a family vacation.
Involving kids in planning a family vacation can be an excellent educational opportunity and a fun activity for the entire family. Begin by creating a vacation budget. Discuss how much money you have to spend and what kind of vacation you can afford. Make a list of all the expenses you’ll incur during your vacation, such as transportation, lodging, food, activities, and souvenirs. Determine the most important expenses and prioritise them. For example, because transportation and accommodations are required for the trip, you may want to prioritise them.
Allow children to weigh in on what activities they want to do and what souvenirs they want to buy. This makes them feel like they’re a part of the planning process and helps them understand the significance of making budget-based decisions. Assign each child a specific expense and ask them to research and find the best deals. This assists children in developing research skills and understanding the significance of finding the best value. Examine your spending with the entire family to ensure that you stay within your budget. Keep track of your spending throughout your vacation to ensure that you stay within your budget. Encourage children to participate in this process and consider ways to save money during the trip.
2. Help kids set short-term and long-term financial goals.
Setting financial goals is a critical step in assisting children in developing good money management habits. Short-term goals are easier for children to grasp and can be accomplished more quickly. These objectives can be as simple as saving a certain amount of money each week or month or making a certain number of purchases without going over budget. Make certain that the objectives are both realistic and attainable. This will make children feel successful and motivated to set and achieve financial goals in the future. Long-term goals are more difficult to achieve but are also more rewarding. Set long-term financial goals with your children, such as saving for a larger purchase, such as a bicycle or computer, or for a future trip.
Encourage children to set aside a portion of their allowance or earnings for short- and long-term goals. This will help them understand the significance of saving and the advantages of having a savings account for the future. Keep a record of your children’s savings and expenditures to help them track their progress towards their financial goals. This will allow them to see the results of their efforts and remain motivated.
Celebrating with your children when they achieve their financial goals is the most important thing. This will make them proud of their accomplishments and motivate them to continue setting and meeting financial goals.
3. Encourage kids of all ages to earn money.
If your teenager doesn’t have a part-time job by the time they start high school, let’s talk about who’s paying what for college and whose car they plan on driving when they turn 16. Even if you can afford these luxuries, working teaches teens teamwork, professionalism, and how to manage their time. Encouraging children to work can help them develop good financial habits and a sense of responsibility.
Reward your children for completing household chores or for good behaviour. This can help them understand the importance of work and budgeting. Encourage older children to start their businesses, such as providing lawn care services, selling handmade crafts, or caring for pets. This can aid in the development of entrepreneurship skills as well as an understanding of how to make money. Assist older children in finding part-time jobs, such as babysitting, dog walking, or working at a nearby store. This can provide them with hands-on experience earning and managing money.
Encourage children to collect items they no longer require and sell them at a yard sale. This will help them understand the buying and selling process and the value of money.
Encourage your children to save a certain amount of money each week or month. Make a special treat or a trip to their favourite location available as a reward for meeting their savings goal. Offer to match funds saved by children up to a certain amount. This can motivate them to save and achieve their financial goals.
Children will develop critical financial skills and a sense of responsibility if they are encouraged to earn money. They will also gain a sense of pride in their financial accomplishments and a better understanding of the value of money.
Financial Solutions Inc. can assist you in planning your kid’s future and help you make him financially free and stable.
We offer comprehensive financial planning that addresses all aspects of your financial life. We assist in the creation of a customised roadmap and guide how to utilise best the resources you have to meet your dreams, goals, and desires for your life. Don’t forget that we’re always here to help you achieve your financial goals.
Financial Solutions Inc.’s goal is to assist our clients in maximising the return on their hard-earned funds while keeping their risk tolerance and goals in mind. This is accomplished through careful investment management.