When your children understand the ins and outs of finances, it teaches them how to manage money and other life skills they can take with them into adulthood.
For instance, learning how to save can teach your kids discipline. Showing them how to spend responsibly can lead to solid decision-making skills. And teaching them how to invest can help them learn to deny themselves instant gratification.
Good financial health can do many wonderful things for your children. But they need your help to learn what that actually is.
Here’s how to help your children take some practical steps toward building up their own financial health.
Teaching your children how to make good decisions with their own finances starts with ongoing, age-appropriate money conversations. You must talk about the importance of finances in a way that your child can grasp at whatever age they are.
For instance, you can play “store” with your younger children. Let them be the cashier while you shop around the room and pay for your items when you’re done. Or sit down with your teenagers and help them create a budget for their summer job income.
Also, don’t just talk about basic financial concepts when discussing financial health. Get into how important the right mindset is to doing well with money. And how a healthy relationship with money is connected to good physical and mental health.
It’s essential to highlight the importance of building wealth in your money conversations with your children as well.
It’s important to teach your children not just how to survive but how to create a financially-comfortable life. In other words, talk to them about building wealth.
Start by introducing the concept of investing to your children. Help them practice their investment skills by opening a custodial savings account with them and explaining how interest works.
A significant part of long-term investing is knowing how to let your money sit and accumulate interest. By showing your children how to do that with a savings account first, you’re getting them ready for what it takes to be successful investors in the future.
Helping your children set financial goals can also get them on their way to good financial health.
Those that manage their money well know the importance of setting financial goals. When you show your children how to set financial goals at a young age, it will help them be more intentional about handling money.
Go into these goal-setting sessions with some information on financial trends that may affect your children’s financial health. For instance, if you’ve got a child born in Generation Z, share how kids in this generation are prone to financial anxiety because times have been so uncertain lately. Go on to talk about how gaining more financial literacy can help alleviate this anxiety. Then, aid their journey to financial literacy with hands-on activities like learning to set money goals and develop plans to achieve them.
Proceed with helping them set financial goals, whether saving money for a car, a new toy, or college. Maybe they want to open a checking account, learn more about investing, or create an actual budget on their own. Whatever their money goals are, help your children solidify and achieve them.
In addition to setting money goals, assist your kids in creating vision boards.
A vision board can help your children envision what they want their life to look like in the future. It can also be a great segue into a conversation about what it will take financially to achieve their life vision.
If your children put nice cars and homes on their vision boards or share that they want to travel or own a sports team, you can show them how much these things cost and talk about how they plan to make enough money to afford these things.
Another way to help your children build up their financial health is to encourage them to earn their own money.
One of the best ways to help your children grow a healthy relationship with money is to let them handle it on their own. In other words, help your children earn their own money and encourage them to manage it independently.
Help your teens get a summer or part-time job and start a relationship with a financial institution to manage their paychecks. Also, consider giving your little ones an allowance or paying them for doing household chores.
Furthermore, you must practice what you preach to your kids about sound money management.
Simply put, you must practice what you preach about financial health. We all know the saying, “Children do what they see, not what you tell them to do.” So, show them what financial health looks like through your own actions.
Have those honest conversations with yourself about where you’re at financially. Set your own money goals and create a vision board for the next stage in your life. Be diligent and intentional about your career and how you make money. Get back on track when you stray from your budget. And be sure you’re focused on building wealth for your family.
Teaching your children about financial health at a young age is one of the most supportive, loving things you can do for them. By showing them how to spend, save, and invest every dollar wisely, you’re setting them up for a secure future. Use the tips above to guide your children to good money management habits they can take with them into adulthood.