Raising children is a constant balancing act. You want to provide structure and stability, but you also don’t want to run an overly strict household. It’s important to you to show you care about your child’s whereabouts and choices, but you don’t want to be a helicopter parent. You want your kids to do well in school, but you don’t want to put too much pressure on them.
Giving your children a sound financial education should be an integral part of your parenting too, and it all goes toward creating this balance. To make things easier, we’ve compiled a list of five steps you can take to teach kids financial responsibility.
- Use an allowance as a teaching tool
Studies say 89% of parents who give their kids an allowance require them to earn that money through chores, but it’s best if allowances are not granted as a reward. Instead, use them as a teaching tool. By giving kids their own money with no strings attached, you can help them learn how to manage their money and control their spending habits. You can use this opportunity to help them implement the three-jar system, in which they allocate predetermined percentages of their money toward spending, saving, and giving. You can also open a Lil’ Partners Saving Account to give your child a place to save and spend responsibly.
- Boost their confidence
Peer pressure is a lifelong struggle that may be strongest during the school-age years. Help your children make the right choices by fostering a sense of worth independent of material possessions. Boost their confidence so they feel good about themselves just for who they are.
- Say no
It’s crucial you refuse your children’s requests on occasion. Everyone needs to learn how to accept a no. Say your daughter asks for a $200 designer jacket she doesn’t need. If you give in to her begging, you may be affecting her future choices and standards in two ways. You have diminished the value of $200 in her eyes. You are raising her standards to a level you or she may not be able to sustain. When turning down a request, don’t mention money. Instead of saying: “We can’t afford that right now.” Try: “You don’t really need that right now.”
- Encourage work
Kids who hold down a job are getting a head start on life as an adult. Encourage your child to look for a summer job, mow lawns for neighbors and accept occasional babysitting jobs. They’ll learn responsibility, develop a work ethic and start to value money more.
- Model gratitude and giving
One of the most important lessons you can give your children is to appreciate what they have and to give back to others. Use every available opportunity to model these behaviors for your children. Make gratitude a family project by having every child share a part of the day for which they’re thankful at the dinner table. Or, create a “Jar Of Gratitude,” in which family members drop small slips of paper describing something they’re grateful for, to be read aloud weekly in front of the entire family. Do the same with giving, bringing your children along with you when you donate old clothing or food. Allow them to watch you give money to your favorite charitable causes.
By helping your children develop these habits and essential traits, you’ll ward off feelings of entitlement and raise kindhearted, giving adults.