The old saying is true, the apple doesn’t fall far from the tree. It’s because our kids watch us and mimic our behaviors to a degree. This also applies to finances. It is crucial this day in time to teach your kids the value of money so they can learn to save. This article is going to give you some tips on how to get your tween or teen to be wise with their finances.
Be A Positive Financial Role Model
Kids watch us even if we don’t realize it. So be an example show your kids the proper way to handle finances and how to avoid pitfalls. If your kids are hearing you getting phone calls from collection agencies, they’ll think that’s normal. Instead, show them how you save money each month to pay off all your bills on time.
Teach Kids The Value Of Money
When your kids are old enough, stress the importance of money and hard work. Teach them how difficult it is to get money and thus how important it is to save money. You can even encourage them to get a job when they’re old enough. It will give them a head start on what to do as they get older as well as give them a head start on learning about being financially responsible.
Start Building Their Credit
Having good credit, not having debt and having savings are all important parts of being financially responsible. Often times our children may understand how to save money and not borrowing money, but they may not quite grasp the concept of credit. One way to help them is to add them to your credit card account. But make sure to put strict spending limits on the card. This will teach the responsibility of keeping the account in good standing.
Reward Them For Saving
Reward your kid for being responsible by matching (or partially matching) the money they save every time they put money away. It will give the child more incentive to establish a good saving pattern. If they manage to save up $100, do they spend it or save it and turn it into $110? It will be like an account that earns interest. The more you put into it, the more you get back. Talking about saving and interest is boring, but a real life experience can make all the difference in the world.
Be Strict With Them
If your kids make bad money decisions do not bail them out. They need to learn the hard way. So if they run up a $500 debt, let them ruin their credit and work hard to pay it all back. Do people bail you out when you get yourself into a financial mess? I didn’t think so. Since your kids are still young, they’ll have enough time to clear up their credit score before they make large purchases like a car or a house.