How to Teach Your Child Financial Responsibility From A Young Age

There is a difference between being poor and being broke. The broke is temporary. Poor is eternal.?

?????????????????????????- A line by Robert Kiyosaki, author of Rich Dad Poor Dad.

Raising a?financially responsible child?is golden on so many levels. And you want to lay a foundation that they can build upon to do well in life. In addition to that obvious practical application of understanding how to use, save and invest money, consider the benefits of debt avoidance, personal responsibility, and added confidence.

Start With the Basics at a Young Age

It is better to start early, teaching about financial education to your kid as it will be a great help and will form a money mindset and attitude towards finance. Even if you are not teaching your children at a young age, they will learn the lessons about money one way or another way. When our kids express interest in?family bills, we answer their questions in a non-emotional way. We don’t want them to learn to be scared of money or stressed about money before they are old enough to even understand it.

If you want to play an important role in shaping your kid’s feelings, thinking, and values of money, you need to give them a head-start for financial literacy from a younger age. Once your child is old enough you can introduce them to cash and debit/credit card, explain how it is done by showing them during when you make a purchase of something, you need to take the receipts with the amount you have paid. This will create a good habit for them, and as they grow old they will start to understand about it and how the money works as it is more effective.

Value of Money and Values Around Money

Your children's first contact with money will almost certainly entail spending. They notice you utilizing it to buy goods, even items for them. As a result, it's critical to instill in children at a young age that money isn't only for shopping; they should also be saving money on a regular basis.?

Saving money is more than simply a good financial habit. "Saving teaches patience and delayed satisfaction," adds Renick. "Saving helps you to create goals and plan ahead of time." Preparation is more important than saving. Saving increases one's security and independence."?

Give your children a piggy bank or a savings jar where they may put coins or cash to help them develop the habit of saving. Then, to inspire your children, utilize short, basic statements.?

Parents might also urge their children to save more by offering to match their savings dollar for dollar or buy a set percentage. If your children have reached the age when they can progress from a piggy bank to a real bank.

Help Kids Learn to Make Smart Spending Decisions

Sheehan wanted his children to realize that money is earned, so he instituted an allowance system so they could learn to live within a budget. Sheehan claims that his two youngest children, ages 16 and 11, would continuously ask for money and "spent like drunken sailors." When he first started giving them allowances, he informed them it was all the money they'd get and that it was up to them to handle it.

Show Kids the Value of Giving

One of the most essential reasons for you, as a parent, to teach your children financial skills is that you can share your money values with them through those teachings. If you value giving to others, you may establish that value in your children by assisting them in making it a habit from a young age.

Model Good Financial Behaviour

The methods you speak and handle money while you're around your children are just as significant as the lessons you educate them about money. For example, if you grumble about having to spend too much money on some items and then go on a shopping spree with your children, you're sending contradictory signals.?

Instead, make sure you model the money-related habits you want your children to emulate. Renick claims that his father would not only push him and his siblings to do housework, but he would actively join in and assist them.

If you want your children to establish excellent spending and saving habits, they must witness you make wise financial decisions. Simply said, practice what you preach. And preach consistently. Educating your children about personal money may be a time-consuming task. However, if you put in the work and consistently express a clear message about money, you will develop healthy habits in your children that will serve them well.