Many people had to learn on their own how to responsibly manage their money. Imagine how different your life would have been if someone had taught you, throughout your childhood, good money habits? Well, you can set your child on the path to financial success by teaching them good money habits early. Here are 8 good money habits to teach your children.
Good Money Habits To Teach Pre-Schoolers
1. How To Save
Teaching your children how to save is probably the easiest and most important money lesson you can teach them. Saving is, after all, one of the essential pillars of finance. It is always best to get an early start. A simple tactic would be to have a savings jar in your home. Implement a fun game of rewarding your child whenever they add a coin or dollar bill to the jar. Once the jar is full, your child gets to spend the money on whatever they’d like.
Good Money Habits To Teach Middle Schoolers – High Schoolers
2. Money Is A Means of Exchange
Children should learn, as soon as they can comprehend it, that the items they enjoy are not free. They were acquired using money. By teaching them this, money will seem less mysterious, and you’ll instill the value of money from an early age. Money is valuable because it can be exchanged for items of value that can be used to enrich your life. So, on your next trip to the grocery store, hand little junior the cash to hand over to the cashier.
3. Differentiate Between Needs & Wants
Differentiating between needs and wants is a tough balancing act. They will also change throughout your entire life. Teaching your young children, the difference between needs and wants could differentiate between them developing poor money habits versus them developing good money habits.
4. Being Charitable
Being charitable is also one of the valuable good money habits to teach your children. As children get older, they should begin to learn the importance of community and philanthropy. Find a cause your child is interested in and encourage them to get involved in philanthropic activities. A great way to teach your children to be charitable is to match any donations they make throughout the year.
Good Money Habits To Teach Teenagers – Young Adults
5. Contentment and Gratitude
Being content and grateful will help teenagers and adults to spend their money responsibly. Teach them that going broke trying to keep up with the Jones and living an extravagant lifestyle will do them a disservice in the long run. An attitude of gratitude also prevents your child from falling victim to schemes that promise quick money but will likely leave them in ruin [Benefits Of Being Frugal].
6. Smart Investing Habits
Instead of chasing short term gain through daily volatility, teach your children long-term investing strategies. Investing should be done periodically in a diversified portfolio with a long-term objective. There should be at least 2 investment accounts. One personal brokerage account that is readily accessible. The other account should be an individual retirement account. My personal opinion is that it is never too early to start saving for retirement [What They Don’t Tell Beginner Investors].
7. Create and Stick To A Personal Budget
This good money habit to teach your children is primarily for high school seniors and young adults. Creating a personal budget is a difficult but worthwhile activity. A budget will teach your children how to live within their means. It will also make them aware of the limitations of their income and to prioritize their spending [4 Reasons Your Budget Isn’t Working].
8. How To Do Taxes
Before sending them off to college, a good money habit to teach your children is how to do simple taxes. Teach them the language and purpose of taxes along with the consequences of not filing your taxes accurately. At minimum, your children should know what a standard deduction is, the different marital statuses and what tax bracket they fall into. The I.R.S. has many free resources on their website to teach individuals about taxes [Where To File Your Taxes For Free].
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One thought on “Good Money Habits To Teach Your Children”
Thank you for sharing this important information.