As a parent, you’ve probably seen your children pick up on your habits – good and bad. Even very young children can observe and take on some of your habits, and that includes your financial ones.
The way you handle, talk about and spend money can create a lasting impact on your children, so it’s important to be intentional with what you’re doing.
Here are some of the most important financial habits you can instill in your children from a young age:
Financial habits to teach your kids: It’s okay to talk about money
When you were growing up, what did your parents say about money?
If you grew up hearing that “money is the root of all evil” or “money doesn’t grow on trees,” it may have had an impact on the way you work with money as an adult. Or, maybe you never heard them talk about money at all, and grew up thinking it was taboo or impolite to talk about finances.
A healthy relationship with money is one that treats it as a tool to be handled responsibly. It doesn’t need to be feared, avoided or worshiped.
So how do you help your children have a healthy relationship with money?
The first step, which can be a challenge, is to improve your own relationship with money. Set boundaries for yourself, stick to a budget, learn to invest, and challenge yourself to steward your money well.
If you’re married or in a relationship, make sure you and your spouse talk about your money. So many people avoid talking about money because they assume it will lead to a fight. But the more you talk about your money, the more you and your partner will be able to work together for a more financially healthy life.
Another bonus: If your kids see their parents having constructive, open discussions about money, they’ll start to see that it’s okay and normal to talk about money, and be more comfortable talking about money in their own relationships.
Money is for the whole family
Teach your kids that everyone should play a role in household finances. This can be as simple as helping them set savings goals for something they really want, or explaining that there is a certain amount of money set aside for fun activities, family dinners or ice cream each month.
Including your children in family budget discussions helps them to understand why they can’t have everything they want right now. It can also teach them the principle of delayed gratification, and why it’s worth it to save for what you really want.
It’s never too early to save
Speaking of saving, remember that even your very young children can learn how to save. It’s a powerful habit to develop, and it’s never too early to start.
Start with small savings goals to teach them the basics. Allow them to choose something small, like a toy, and help them save their money until they can buy it. It’s great to use something visual to store their money, like a piggy bank, because they can see their money grow.
If your child is old enough, try adding chores that are worth different amounts so they can work to earn more money. This will help connect the idea that money can be earned, and help them place more value on the cash they’re saving.
There is value in giving
If you make a point to give money, allow your children to see that, too.
Some people give to a church, a charity, or people in need. However you give, show your children that giving is part of a well-rounded financial plan.
One option for this is to set up different jars or piggy banks for spending, saving and giving. This shows your children that money can be used in different ways.
For their giving jar, allow them to choose a charity, cause or simple act of kindness to spend it on. It’s a small gesture, but it can help teach them that giving money away can be valuable, too.
Do you need help planning for your financial future? Contact me today to set up a meeting to talk about your goals. You can also download my free ebook for physicians for tips and information about getting your finances on track.