We all want to teach our kids to be kind, to be independent, and to follow their dreams. But do we spend enough time raising them to be wise with money?
If we instill good money habits in our children at a young age, they will certainly have an advantage as they move into adulthood.
Here are a few simple tips to help you teach your kids about being smart with their finances.
Make sure they work during their teen years
Your teen should get a part-time job. Preferably something that won’t interfere with sports or school work, but still gives them some responsibility. It can teach them not only about having spending money and managing it, but also that money doesn’t grow on trees. By having to work hard for money, they’ll learn to value it and save it!
You can also teach them to invest the money that they’ve earned. Once they’ve saved an ample amount, introduce them to the idea of growing their money, instead of just spending it on more “stuff.”
Give them a meaningful allowance
If they are too young to work, they still need to learn how to save and manage money. The only way they can do that, other than saving Christmas checks from grandparents, is if they have an allowance.
Giving them money at regular intervals, instead of when they need it to go out with their friends or buy something, will teach them to save money. Teenagers should use the allowance to pay for their school lunch, as well as some non-necessities. This way, they’ll learn to budget it, since they only have a limited amount per week and they need to eat!
Allowance is another opportunity to give young children a choice about spending versus saving. Kids as young a five can start to decide if they want to invest their money and watch it grow, or spend it on something right now. You should help them invest in anything from stocks to their own business!
There are myriad investment apps out there to get young people to start investing early. Stockpile stands out because it lets you buy fractional shares of stocks. This is perfect for kids because your child can choose any company he or she wants, and they will actually be able to afford it!
Teach them about business
Starting a successful business is all about planning ahead: you need to have a roadmap for where your business is going before you even think of a name or make a logo.
The best way for them to learn about money and business is to plan how to start a business themselves. You can help them to write a business plan, break down costs, and offer guidance along the way. Start-up costs are a big component of a new business, so you may want to match whatever money they are going to invest into their business to give them a better chance at success.
If your child is young, nothing beats a lemonade stand. But older kids can think bigger!
For a little inspiration, you can watch TED Talks with them! You’ll hear from business moguls and entrepreneurs such as Elon Musk and Bill Gates. It should inspire them to think outside the box and try out one of their own ideas.
Who knows…your passionate child may end up with a profitable business! It could even be the first step that leads into their future successful career.