Children & Money Management
What a parent says and does regarding money can profoundly influence their children’s future financial habits. What can you do to ensure you pass along good money management skills to your child?
- Set a good example. If you consistently spend more than you earn, don’t set aside emergency savings and don’t budget, that’s the behavior your child is learning from you.
- Use allowance as an educational tool. Teach your child to build in savings, charity and investments, and help them budget their allowance spending.
- Show how saving can add up. Find a financial institution that offers a Kids Savings Account. When children see their money grow, they realize the importance of saving and investing. To help get them started, offer to match a portion of money they save each month.
- When using an ATM, explain to your child that it’s not where you go to get free money. It’s money that you’ve earned and saved.
- Set realistic expectations. Many children think when they get a job they’ll instantly have a large salary. This may lead young adults to take on too much student-loan or credit-card debt in anticipation of being able to pay it off quickly.
Take the mystery out of finances now so your kids will be able to fly the nest financially independent when the time comes – and, so you’ll be able to afford to remodel the nest when they do.