What were you taught about money growing up? What lessons did your parents, grandparents, aunts, and uncles teach you about finances? Did you learn practical money lessons at home, or did you learn them through trial and error as you got older?
Can you imagine how much further ahead you might be if you knew what you know now? This is why it is so important we pass down a financial education to our children. I am all about building generational wealth! However, it is all for nothing if it will be lost due to poor financial management skills.
As parents, we want what is best for our children. We want to set them up for as much success as possible. Think about it, money is involved in almost every aspect of our lives. Shouldn’t we be teaching our kids how to win with money?
There are many ways to teach your children financial literacy. Here are a few ideas to get you started!
Talk About Money - Don’t Make it Taboo
The first step of teaching good money habits is simply to talk about finances. Many people grow up in homes where talking about money is taboo. This can be detrimental to a person's relationship with money in the future.
Some ideas include:
Including your child in everyday financial decisions
Discussing the cost of items at a supermarket
Talking about why you chose one item over another, if cost is involved
Looking at the circulars or for coupons together before going shopping
Having your child help you create and stick to a shopping list
Give Your Kids a Chance to Handle Money
Giving your child an allowance is a great way to give them a chance to handle money. By giving your child an allowance, you teach that money is tied to behaviors. You reinforce that money is, generally, earned (as opposed to always gifted, like on birthdays.) Although you can teach your child that money is earned, you can also teach them that there are ways to passively make money (investments), we will discuss this later.
Once your child earns their allowance, or “wages,” you can then reinforce that money should be allocated to specific purposes: spending, saving, investing, and giving back.