Good financial habits are not an accident. Advertising and media influence the minds of children. It would not be good to let the world’s ideas about money be the only messages that your kids are exposed to. More often than not, society is a good example of how not to handle money. It’s up to you to teach them, and there are some important things to teach them about making good financial decisions.
Be aware that your kids pay attention to how you handle money
Set a good example for them. They’re listening whether or not you realize it. They will hear you talking about things like saving for items rather than using credit cards to buy things you can’t afford at the moment. They will hear you talking about investments. Educate yourself about your finances so you can pass good information along to them. Not all your financial discussions will take place in front of your kids, but make sure the ones that do are positive.
Teach them about investing
Be informed so that you can give them accurate information. No, your first-grader isn’t going to be on the trading floor in a month, but the messages he or she hears now will stay. Teach them that investing is good for their future. Tell them the difference between stocks and bonds. Talk about investment trends and give them resources where they can find bond investment tips when they are older. For instance, bonds are becoming less popular at the moment. Things are continually changing. Keep it age-appropriate so that they can understand.
Teach them about smart use of credit
Teach them about interest rates and credit scores. Explain that credit cards are best used for emergencies and are not permission to spend more than you have. Take out a calculator and show them examples. For instance, something purchased on credit can end up costing much more than its original price if you don’t pay it off quickly. This can easily evolve into conversations about staying within a budget. It will make more sense to them when you tell them you can’t buy them something. If you don’t teach your kids about credit, they will be at risk of making poor decisions once they become young adults and are offered their first credit card.
Teaching your kids about money and finance starts with you. This is a big responsibility and part of good parenting. Giving your children a good financial education is worth more than you may realize.
