No matter who you’re with, talking about money always seems to be an awkward conversation topic. Still, teaching your children how to handle finances is crucial in order to ensure that they handle themselves well as they become more independent. Here are some tips to help you teach your kids to manage their finances.
Start Young
The younger your child, the quicker they are to absorb new information. While you may not want to bombard such a young child with serious money matters, it’s worth teaching them basic concepts. Take them shopping so they can learn your shopping habits and show them how you choose items and save money so that they latch onto the concept early on.
Allowances
If you want to give your kids an allowance, make sure to calculate a reasonable amount that you can give them on a weekly basis. Make sure they understand that they won’t get any more money before the next allowance so they will need to spend their money wisely and maybe choose to save. This will help them get used to handling money on a personal level.
Explain Debt
As your child gets older, it’s time to have a conversation about debt. Aside from explaining what debt is, it’s important to tell your kids about the consequences while also discussing ways to protect themselves against it. Some helpful ways to show them debt in action are by sharing your credit card statement and showing them the interest rate you have to pay on outstanding payments.