As parents, we always seek to give the best to our children. We do everything so that they have a better life than we have and are as prepared as possible for life. However, many times we forget to teach our children a subject of enormous relevance in people’s lives: financial education.
Teaching our children to manage their money optimally is something that will improve their lives in every way and they will always be grateful.
Today we want to share with you 4 strategies that you can implement in the education of your children and that will help them form healthy financial habits. We will focus on habits that you can teach them from the age of 12, approximately, when they already have a good notion of money.
Teach them how to make money.
Many fathers are used to giving money to our children every time they need (or want) to buy something or, worse, every time they ask for it.
To teach your kids the value of money, it’s important to teach them how to earn it.
To achieve this, a very good strategy is to offer them to do certain household chores in exchange for a payment.
It’s important that you don’t pay them for the chores they already have to do, but that, for example, you pay them if one day a week they sweep the street, wash the car or wash the dishes. Another good idea is to invite them to get summer jobs that allow them to get extra money and make the most of their holidays.
Assigning them a Sunday or a fixed allowance, if possible, and allowing that amount to cover certain personal expenses or tastes will also help them better manage their money.
Teach them to keep track of their expenses.
When we’re kids it often seems like money burns in our hands, we look for ways to spend it quickly and most of the time we don’t care what we spend it on. Unfortunately, this habit becomes part of our lives and affects so many adults.
To correct this bad habit in time, invite your children to write down in a notebook how much money they spent and on what they spent it. Each week, you can ask them to show you their spending record from the previous week.
Teach them to keep a budget.
After your kids know what they’re doing with their money, as a result of recording their expenses, they’ll be ready to take the next step: decide, before they receive their money, how they’ll use it!
To do this, teach them to record in a notebook how much money they received, how they are going to spend it, and how much they should have left over by the end of the week.
Each week, when you give them their Sunday, ask them if they met their budget. If they didn’t do it and spent more than they had planned, go over their spending record with them and help them identify why they didn’t meet it and what they could do to stick to the budgets they define.
Learning to budget for income and expenses is one of the most valuable tools you can teach your children.
Teach them to save and set financial goals.
So, your children already know how to make money, they already know how to identify what they are spending their money on and they already know how to budget… they are much more advanced than the vast majority of adults in Mexico! It’s time to take the next step: teach them to save!
To teach them how to implement this very important habit, we recommend asking them to save a tenth of the money you give them (from their Sunday or their allowance, for example) and asking them to deposit it in a piggy bank.
Another great strategy to complement is to help them create savings that will go toward specific goals. For example, if your child wants to buy a toy he or she really likes, they can use an extra piggy bank and stick a label with the name of the toy and suggest that your child also include this savings in his or her budget.
It is important that this type of savings for specific goals be in addition to the 10% mentioned above.
You can be sure that instilling in our children these 4 habits for the correct handling of money will have a very positive and lasting impact on their lives. Having personal finances helps us to live better, to live more peacefully and to achieve well-being.