According to the Department of Agriculture, a middle-income married couple with two kids is estimated to spend $233,610 raising a child born in 2015. Parenting is undoubtedly expensive, and in order to provide the best possible life for your children, you need to have a good understanding of your finances. This is a skill that will not only help your kids as they are growing up but later in their life as well. Teaching your children financial responsibility is something of a lost art, but it doesn't have to be. Here are some tips on instilling good money management skills in your children.
- Paying Children Allowance
In order to teach financial responsibility, your children first need to have access to money. This way they have some autonomy over their financial decisions and can practice saving and spending money from their allowance app in the real world. Don't just give your children money, though. They need to earn it. Talk to them about doing chores around the house in exchange for an agreed upon allowance. This doubles as a teachable moment for eventually negotiating a salary much later in life, even if they don't know it at the time.
- Using a Chore Management App
Technology is great. Instead of relying on your memory for whether or not your children did their chores, you can use a chore management app to track their progress. A chore chart applies to many other areas of adult life as well. Scheduling an appointment, sticking to a deadline, and juggling multiple responsibilities are all skills implicitly learnable from familiarity with a chore chart.
- The Two Hands Trick
When it comes to spending or saving their money, kids will always want to spend it. Explain to them how saving can lead to bigger and better things. Instead of a plastic dinosaur, they could save up their money for a go-kart. Here's a tip everyone can benefit from. Pretend you are holding the money in one hand and the thing you want to buy in the other. Think about which hand you would choose. It's a simple exercise in frugality, sure, but it can stop anybody from making impulsive purchases.
Managing money isn't just a thing parents need to worry about. Kids are capable of understanding much more than they are often given credit for. That's why teaching fiscal responsibility young can have a truly lasting and beneficial impact on their lives.