Kids have many rules. Despite what they think, rules make their lives easier. No, parents set boundaries to protect their children from harm, misery, and underachievement. Rules for kids are essential for life, and teaching them about money is no exception.
If parents don’t educate their kids with basic money rules, they handicap them and make financial success harder. But when they do pass these principles on, they set their kids up to CRUSH their money and lives.
Remember that as we discuss these 9 money guidelines for youngsters, use regular instructional moments to teach your kids about money and life.
Working earns money.
Kids must learn this important money rule. Work and money must be taught early on. If they don’t and get too much without working for it, entitlement can quickly set in.
How to teach it? You can use the sample chart below. Every week you can pay your kids “commissions” based on the work they have done. – No work, no pay. Simple.
Needs vs. Desires
Adults also confuse wants for needs. This is one of the most crucial money rules for kids to learn if we want them to be better, less consumer-oriented, keep their spending under control, and avoid the debt this generation is drowning in.
Parenting words matter. They show our beliefs. It can look like we need things if we keep stating we do. Junior will soon use the same jargon.
Keep your mouth shut and be mindful when your kids say they need something but really want it. If any of you misspoke, utilize it to discuss needs versus wants.
Give first before you spend or save
For both ethical and practical reasons, generosity should be taught to children as early as possible.People who donate, or even just think about giving, tend to be healthier and happier, according to research. Not only that, but generous giving helps people overcome the chronic stress they feel about money.
After giving, saving follows
Kids should save money after giving. As a kid, saving a lot offers huge benefits. They may buy candy, soda, and other pleasures. They could save up and buy something killer they’ve been eyeing for months or years.
Try this, buy a variety of small goods your child buys like Candy, Pokemon cards, Shopkins—anything. To save money, aim for $10. Include your kid’s favorites. Wrap and decorate it. Find a picture of the item they want but can’t afford online. Possibly a bike, video gaming system, or toy. Wrap it then and make it look nice.
They’ll be amazed when you bring in the wrapped gifts and eager to open them. Tell them they can choose between two gifts. It’s safe to assume that the sweets and Pokemon cards will excite them, as would any typical child. But they’ll be SO EXCITED about the bike that they’ll decide to retain it no matter what!
Explain that kids can buy a year’s worth of candy or miss the smaller treats and keep the bike. Add that if they save for the bike, you’ll contribute a specific amount each month to help them accomplish their goal faster. (This can start a discussion on investing and interest).
Let them pick, encourage good decisions with “interest” payments and let them feel the pain of instant gratification if they don’t. Don’t buy them the bike they wanted. Instead, use it to start a terrific conversation about how this money guideline for kids can pay off.
Spend less than you make
After giving and saving, spend the rest. Great if they have the money to do and purchase everything! Encourage your child to spend on any appropriate item. Probably not enough to satisfy all their needs. In this instance, they can earn more money or spend less to buy more of what they want.
While it’s true that money can’t be created out of thin air, more is always available (abundance vs. poverty mindset)
True, you won’t find any cash plants. It is a limited supply. That said, it’s still possible to acquire more. Two distinct mentalities exist in regards to monetary resources: scarcity and abundance.
Believing that resources are limited or that others have an unfair advantage means adopting a scarcity mindset. As far as it is concerned, there is a limited supply of money. The latter, please.
A worldview of abundance, however, holds that one may always acquire additional resources. If the budget isn’t renewed, the money will run out. The money in my bank account will run out if I don’t go to work. This is a harsh reality that young people must understand. But there are things I can do if it does hit zero or if my money are running so low that I can’t afford to meet my needs or indulge in some of my pleasures.
I may either work harder to bring in more money, or I can cut back on some of my other expenses. If you adopt an attitude of abundance, you’ll always be able to find a means to afford the things you want. On the other side, those who have a scarcity mentality believe that there is never enough and that there is also no means to obtain more.
You save money by waiting before making a purchase (and spend more when you don’t)
Sure, we’ve all bought something on a whim and been happy with it. We forget all the times we foolishly spent money on an impulse buy and regretted it afterwards. When we buy anything without thinking about whether we want or need it, we give in to our natural impulsivity and selfishness, which parents try hard to eliminate in their children.
When the ice cream truck drives by, youngsters go crazy because of their wants. The one that makes youngsters slam their bedroom door when parents won’t allow them to buy that must-have clothing. I’m still trying to get rid of the trait that let me buy a cruise from a telemarketer.
Mistakes help us learn
Let your children learn from their financial missteps. They want to make a foolish, ultimately regrettable purchase with their hard-earned cash? Yes, let them.Can you imagine them opening a car wash in the dead of winter? Let the carnage unfold in front of your eyes.
Do not act like a “helicopter parent,” who constantly rushes in to fix things.
Your child needs to go through heartache and failure in order to grow and develop. To fail painfully but not catastrophically is what we call it. Regret is an uncomfortable emotion, yet it is not always negative. One of the most important lessons children can learn about managing money is that they shouldn’t be afraid to make errors.
There are more things in life than Money
Money matters. Undoubtedly. It affects our romantic relationships, families, careers, and retirement daily. Without core money rules, youngsters would suffer in each of these areas.
Money isn’t everything. It doesn’t matter most. Nah. It shouldn’t be your world’s sun.
To win with money, you must put it in its place in life. It wants your faith, family, and physical and mental wellness. It will cause major issues if it rises in priority. You’ll prioritize your finances over your spirit, relationships, and health.
Live this money guideline every day to teach youngsters. Your kids must observe your priorities daily. How do you decide whether to take cash for a side job or report it on your taxes? Do you go back and pay if the grocery store clerk misses an item and gives it to you for free?
Do you leave a note with your contact details after the parking lot dings, or do you speed away hoping to get away with your “small” infraction? Kids watch. They perceive our behavior and values. They calculate. Be honest, ethical, and hardworking to show them what matters. As all parents know, more is caught than taught.