Being financially responsible is not something that you learn overnight. It is a trait that you learn over time. Your experiences in life will teach you how to be more responsible in handling money. If you were not taught at a young age to be wiser in spending your money, you will carry it as an adult.
Now that you are a parent, it helps that you also teach your kids to be more financially responsible. Training must start at a very young age. They will develop the necessary skills later on if you keep instilling the right values to them. Once they become financially independent, they will know what to do with their money and how they can have enough savings for the rainy days.
This is one of the most important skills that you have to teach them as a parent. Below are some essential tips on how you can let your kids be more financially responsible.
1. Use the Right Container for Saving Money
Kids love to use piggy bank to save money. It gives them a sense of accomplishment. Perhaps, you have done the same thing when you were younger. You can continue teaching your kids to use a piggy bank too. This time though, use a clear container. This allows them to easily track their savings and be more motivated to keep putting more.
2. Set an Example to Your Kids.
As always, what is wrong becomes right in the eyes of the child if their parents do it. Therefore, it has no meaning if you teach your kids to be financially responsible if you are doing the exact opposite. You have to walk the talk. Show to them what it means to be one so they will easily follow later on.
3. Teach them the value of items.
When shopping, you let them be more involved. Tell them what it means to buy certain items and how much it would cost. You should also explain to them why you have to buy one over the other in terms of price differences. This will make them realize their priorities if they are to make their own shopping decisions later.
4. Make them Understand Opportunity Cost.
Perhaps, it is too young to explain the technical aspect of opportunity cost. You can make it simple though. The concept is pretty simple. If they buy one item with their money, they let go of the chance to buy another item. This means that they have to make the right choice on what to buy. Is a toy car more important than a pair of socks even if they have the same price?
5. Make them earn their Money.
This is only applicable to teenagers. It’s not that you want them to work at a young age. You just want them to see the value of labor. They need to understand why they have to work and what happens if they don’t. It is better than making them rely on you all the time.
6. Start Opening a Bank Account for them.
For teenagers who are eligible for opening a bank account, it helps if you make them get one. Tell them that their money is inside the account. They are free to do whatever they want, but if it dries up, you won’t refill it. This will make them more responsible in making financial decisions.
7. Introduce the Concept of a Summer Job.
Let them start doing summer job if they are old enough to work. This is real job that lets them earn real money. Not only does it make them become financially wiser, it also teaches them work ethics.
8. When Budgeting, let them help.
If you are budgeting at home, tell your kids to join you. Let them ask questions if possible. Make them see your process and why you make certain decisions.
9. Teach them that Giving is better than Receiving.
Though you want to teach them to save money, you should also teach them how to give one to those in need. Being financially responsible is not just not about having enough for yourself, but also having some to share with others.