1.Teach them to respect money!
If parents treat money with respect, watchful eyes will learn. What ever happened to “Find a penny pick it up all day long you will have good luck?” I watch children walk by pennies or drop them on the ground. They need to understand that one cent can’t set the foundation and it can’t grow into whatever they make it.
2.Teach the difference between needs and wants.
It’s ok to say, “No, you don’t get that sweater this week because you need a pair of shoes. Teach some things are expensive and need to be saved up for. Don’t just hand them everything they want; it won’t help them appreciate the things they receive in the long run. Also, let them make money decisions at an early age.
3.Help encourage them to save their money instead of spending it.
4.Make sure your child understands the connection early between hard work and a paycheck.
Don’t just give them allowance, instead have them do chores to get that allowance. If they want money or even extra money, it’s ok to make them earn it. No handouts. Teach them early how the world works, that way they will grow up with the concept of real life and they will be able to survive on their own. Write children checks to encourage them to leave their money in the bank. Giving out cash makes it easy to spend.
5.Teach children about credit and how important it is.
Some children’s toys now come with “play” credit cards. Explain to them it’s not just free money.
6.Encourage them to get a small job when they are age appropriate.
7.Teach your child about investments and how to make their money grow.
No better teacher than experience. Teach them the difference between being a shareholder or just a customer.
In the long run, you will be doing your child an extreme favor by teaching them healthy money habits. Money management is one of the biggest struggles in the world with the reason being growing up money is not a thing discussed with children. It’s so important to teach money management, needs vs. wants, saving vs. spending. Smart money management teaches children how to set lifetime goals.