Warning, this statistic might alarm you. Millennial parents (age 18 to 34) are the least confident generation when it comes to explaining money management to their children. Only 60% feel confident. Compare this to 76% of parents 35 to 44 years old, and 79% of parents 45 to 54 years old feeling confident in teaching financial responsibility, and you see that there seems to be a steep drop off in overall financial literacy. This is not only a shame for millennial parents, but it's potentially harmful to their children's future. Luckily, teaching money management skills isn't as hard as you might think. Here are some easy educational techniques that can help instill financial responsibility in your youngsters without too much research.
- Managing Household Chores
By teaching your children that they need to work, i.e., provide value, in order to receive money, they will appreciate what they have more than if it was just given to them. Using a chore chart app to track their progress will make this process easy. Tracking kids chores will also hold them accountable for the work they do and hold you accountable for paying them.
- An Allowance Debit Card
Spending an allowance is a lot different today than when you were growing up. A few dollars and a walk to the store is no longer how people spend money. An allowance debit card will give your children total control over their earnings, and teach them what real life debit/credit card use is about.
- 401 Kids
Letting your children have free reign over their spending is obviously silly. Teach them to save a portion of every dollar they earn, and that habit will grow with them through life. Incentivise it further by setting them up with a bank account. Every time they put some money in, match that amount. This informs them implicitly about how a 401k works and can help solidify good saving habits.
Teaching your children how to manage money at a young age might seem intimidating and outside of your parental reach, but don't sell yourself short. The above techniques are implicit ways to educate your kids about money management without needing to feel confident about your ability to explain explicitly.