People spend their entire adult lives trying to recover from poor spending habits. The old adage, “If you know better, you’ll do better,” comes to mind. What if in school, you learned not only how to count money, but how to grow money too? Thankfully, we can use lessons from our not-so-great decisions to guide our children into making better ones.
- Show Them The Value of Their Dollars Sit them down and make a paper trail for all of the household items that they use everyday. Let’s say they earn an allowance of $20. Use this as your starting budget. Have them write out a list of the things around the house that they use everyday. When that list is done, take a trip to the store and have them price all of the items on their list. This will help them learn just how far every dollar stretches, along with prioritized decision making when it comes to spending money. The next time they want to use five paper towels for the job of one, they’ll think back to this moment before being wasteful.
- Earned Commission Over Allowance Nothing teaches the value of hard work like having to earn everything you have. You shouldn’t reward kids “just because.” This creates an attitude of entitlement and laziness. Having them put more effort into doing their chores or going the extra mile to complete household tasks that weren’t asked of them promotes diligence and instills an attitude of humbleness instead.
- Open a Money Market Account Kids need to know that saving is important, but take a regular savings account to the next level with a money market account instead. The amount of money needed to open the account is slightly more than a straight savings account, but they earn higher rates of interest than regular savings accounts. This is an excellent way for your kids to understand the concept of interest, which is like being rewarded for saving money.
- Download the App Stash It’s important that your kids understand that investments aren’t just for Wall Street brokers and that you don’t need a ton of money to invest. With this app, you get various investment options along with personalized guidance from professional finance advisors to walk you through your investments and you can start with just $5.
- Partnerships Collaboration over competition. Everything isn’t a race to see who can outshine one another. Having a communal attitude can propel children much further than believing that it’s always every man for himself. Working alongside a person with similar ideas will keep their minds open and show them that success is not one man’s race. Humility and learning how to work well with are intangible life skills that money can’t buy.
- Start Early It’s never too early to teach your kids about money. It’s better to mold their habits when they are younger so that they have an ample amount of time to put them into practice. It is more challenging to break bad habits, so start as early as possible.
Dr. Jewel Tankard is a Bravo TV personality and personal finance strategist with a degree in economics from the University of Michigan. She hosts the “Jewel Tankard” show on the Impact Network and is founder of the Millionairess Conference coming to Atlanta, Ga January 20th, 2018. Connect with Dr. Jewel on Twitter via @JewelTankard.