Teach Kids Smart Money Habits for Life.
No one teaches smart money habits - most people just learn them as they go along. A lucky few have a guide, someone they trust who will give them straight answers, but most of us bump along and make a few money-related mistakes before we figure things out. It doesn't have to be that way, though. A study by the U.S. Department of Labor in 1997 indicated that 40% of American children receive regular allowances or gifts of money from their parents or guardians averaging $50 a week! That's a lot of money, if you think about it, and we all know that savvy marketing targeted specifically to children can quickly entice that money out of their pockets.
Give a kid the life-long advantage of smart money habits.
Think like a techy
One of the best features of implementing BudgetPulse is that is puts all the facts right in front of you - and in front of the kids. If you set up your child's accounts in BudgetPulse, they too can take advantage of the features and tools that show them where their money is being spent, and how much they have saved for later.
Children these days are exposed to high levels of technology, and it's something they understand. So thinking like a techy and applying BudgetPulse to your child's budget serves the purpose of communicating with your child in a way they are familiar with. As kids see where they spent their money, they are more likely to keep a closer eye on those smaller dollars and coins and be aware of their choices. As they grow older, they are more likely to apply this learning to their grown up budget.
Make allowances count
If your child does regular chores and receives an allowance for their contribution, then consider going beyond simply how to spend the money and require them to save for bigger items they want or invest some of their money in higher yield savings or money market funds for their own contribution to college. Nothing says you have to do it all, and they'll know where it's ultimately to be spent while they see the account's balance grow, even if just a little.
Kids learn more and are more likely to retain when they see lesson, not just hear it. So, consider exposing the cost of what it takes to feed an entire household, including the pets, so they have a better appreciation not only for what you are doing on a day-to-day basis to care for and support them, but also so they better understand when you have to say no. Taking the mystery out of money management can give your kids a solid understanding in wise money management for a lifetime.
Walk the walk
How much you expose your own financial status to children is, of course, up to you. Children and teens who are exposed to money management and can see how money can be used wisely to build financial stability will understand how to manage their own money far better than those who have been kept in the dark. But children and especially teenagers also despise hypocrisy, so you have to walk the walk.
Telling them to save their money means nothing if you don't have your own savings. If they see you struggle to pay bills while at the same time continuing to buy new items on your credit card, that speaks volumes to them and shows them how you manage your money. Show kids what you are comfortable with sharing so they can see how much it costs to say run a household, or care for a pet, or buy a car. This will help them see all that you are doing to manage your own money carefully and teach them how to do it as well.