Teaching your kids good money habits is not easy. It is not a one-time tutorial, but instead an ongoing process of setting good examples, explaining money concepts and letting them learn by trial and error. However, it is an important lesson that is best learned from their parents. Teaching them the value of saving versus spending is the first step.
Learning The Value Of Saving
As frustrating as it may be to a young child not to get what they want, when they want it, it can also be rewarding. Most children learn the basics of saving through getting an allowance or payment for chores around the house and using that money to buy the things they want. However, many parents easily give in to children who beg and plead for a new toy or treat instead of teaching them the valuable lesson of how to save.
Beyond teaching children how money works, which is done to some extent in school, the more important value that parents can impart to their children is the satisfaction that comes from earning rewards. If a child wants a particular toy, explain the cost and what they will need to do to earn that money and how long it will take. Do not give in to children who already understand the concept of credit and asks to have the treat or toy now and promises to do chores later to earn it. This is exactly what you do not want to teach them! Instead, allow them the satisfaction of working hard to save the money they need to purchase the reward. They will appreciate what they buy even more, and learn a valuable lesson.
Financial lessons are better learned earlier than later, when credit scores can haunt them for years to come. Give your children the tools to learn the value of saving versus spending from the very beginning, to prepare them to be independent and financially responsible.