How to Teach Your Kids About Money in 2022
As a parent, you would naturally want the best for your kid. This does not always mean getting them the best clothes, the coolest gadgets or the latest toys. It most likely means you would want them to have a safe and secure life.
Teaching your kids about money can go a long way in safeguarding their financial future. Here are a few tips as recommended by our Trust Life financial advisors.
- Set up a bank account for your kids
You can easily open a bank account for your child and let them have their own debit card. It may look a bit useless at first, but it is a great way to introduce money management and budgeting to your child.
Start depositing a fixed amount into your child’s bank account every month and ask him/her to stick to that monthly budget. Teach him/her how to:
- Use a debit card.
- Withdraw money from an ATM.
- Manage budget over a certain period of time (like a month).
- Prioritize expenses based on needs.
- Get your child a clear piggy bank
Get a see-through piggy bank for your child so your kid can see what is inside.
Seeing the coins piling up can be good way to illustrate savings. Similarly, the opposite is a good way to demonstrate expenses.
- Let your kids earn their money
It may be tempting to give your kid a small allowance of $5 a week; however, keep in mind that letting your kid earn that money is a valuable learning experience for him/her.
Why not ask for some basic jobs to be done to earn that weekly allowance? This can be anything like taking out the trash, cleaning his/her rooms, doing homework on time or helping in the kitchen.
- Introduce long-term planning
While planning for vacations, ask your kid what s/he wants to do.
Is there any theme park s/he dearly wants to visit? Why don’t you make that a financial goal for your child? Introduce your child to the habit of saving money for the future. It is all about spending a little less right now so your child can have what s/he really wants later.
- Teach your child about giving
Giving back to the society is always a beautiful gesture. Whether it is a charity or a fundraiser or even giving some money to the street musician, ensure your kids know what is going on.
You can even give them some money to do the donation. Keep this in mind the next time you do a fundraiser or a donation.
- Take your child to the grocery store
When doing your weekly groceries, bring your child along. Let him/her know what is going on – what you are putting into your shopping cart, how much it costs, how much you save if there is any discount applicable, etc.
Let his/her do the calculations. This is also an excellent way of teaching your kid basic math from real life examples.
- Practice what you preach
Lead by example. If you do not practice what you preach, you cannot expect your child to do sensible money management.
Avoid impulse buys, invest wisely in RRSPs and RESPs for the long term financial safety of your family, and get a life insurance in place. Maintain a healthy relationship with money. This will give your little ones the right tools for their financial future.
Safeguard your financial future by talking our Trust Life financial advisors
Talk to our experienced financial advisors to know more about affordable insurance and invest plans according to your budget and financial goals. Our advisors would assess your needs and goals carefully and come up with the best plans giving you the highest value for your money. No fees, no obligations.