Teaching Your Children To Be Financially Prepared For Life

Written by on November 12, 2012 in Family - No comments | Print this page

|

Whether you have followed all the rules and are financially successful, or you have made a lot of financial mistakes and you’re on the road to recovering, you know how important it is to know how to handle your money well. As a parent, passing on important information to prepare your children for good financial habits is critical to their future.

How Will Your Children Benefit from Preparation?

Poor financial skills can lead to severe financial problems later in life, such as gaining thousands of dollars in credit card debt as a college student or making bad spending choices as an adult. If you can prepare your children with the basics now, they will know how to stay out of debt, make good financial choices and prosper in life. Teach your kids about financial responsibility and the rewards to budgeting and planning, and you will be giving them so much more than money. Ultimately, they will be responsible for their choices, but if you can give them strong skills early on, they will be more likely to make the right decisions.

Kids are Never Too Young to Learn

Whether your child is 4-years-old or 14-years-old, you can teach them something about finance. At any age, you can help them set up a savings account at your local bank. Most banks have programs designed for children. They can make deposits and withdrawals themselves and learn how to save money. They will also learn about interest as it collects in their savings account.

If you give your kids an allowance, or if they have money from odd jobs and birthdays, teach them how to budget their money. They can put a percentage of their money into a piggy bank or savings account, donate a percentage and keep the rest for spending. Teach them to be diligent about dividing up their money into the categories. Let them choose a charity to donate to, and help them pick a savings goal for their savings account.

Teach Them to Shop

Most kids see something they want and have to have it no matter what it costs. That is because they don’t know how much it costs and how that price affects them. Let them choose items to buy on a shopping trip, and discuss the prices. If they already know how to count money, now they can learn how to find good deals and when to forgo big purchases. This is a good time to teach them about saving up for a goal. Sometimes what they want is too expensive to buy now, but if they wait and save, they can get it later. It’s important that they learn how to wait instead of thriving on instant gratification.

Older Kids and Teenagers

As your kids get older, they will probably get jobs and have more income. If you taught them well as children, they should carry on their budgeting practice. You can also teach them how to set up a checking account and balance a checkbook. Teach them about credit cards even if they can’t get one until college. It’s important that they know how debt works and why they shouldn’t buy whatever they want with the card.

Personal responsibility is a skill that many adults lack. Teach your kids how to take care of themselves and manage their money, and they will be far more prepared for the future than most of their peers.

This is a guest post.  Kyla Stuart understands the value of teaching your children financial responsibility. She is a financial services and mom blogger with the fine folks at Kel Credit Repair, a leader in helping families get their finances back on track.

Image courtesy of David Castillo / FreeDigitalPhotos.net

|

About the Author

Guest Blogger

This article was written by a guest contributor. You will find their details at the bottom of the post. To submit your own Guest Post to our website, please visit our SUBMIT page for details about adding your article.