Five ways to teach your children to fill their bank accounts and achieve economic success.
For many, spending comes more naturally than saving. That's because being good with money isn't innate—it's learned. It's a practice that, when taught at a young age, can become a pattern in adulthood. And saving isn't the only thing: Budgeting, setting goals, making careful decisions and building a foundation for future success can all be imparted to kids through simple conversations and hands-on lessons that help them form strong financial habits. Here are some ways to instruct your offspring on how to manage funds, whatever their ages.
1. Inform them about money early on. Start with a piggy bank, then when they're old enough, set them up with three jars—save, spend and give—and get them into the habit of putting a portion of everything they earn into each vessel. Imagine how much better off we'd all be if someone had encouraged us from the time we were children to put money away every time it came into our hands.
2. Talk about your finances with your kids. Mentioning the almighty dollar shouldn't feel taboo. It's intertwined with our values, desires and goals, so make it an everyday topic of conversation; discuss what it means and where it comes from. As your youngsters grow up, show them your paycheques, as well as how you budget, handle bills and save.
3. Get them to make their own cash. Have your little ones earn an allowance, and perhaps offer them extra moola for additional chores. Once they're older, they can do odd jobs such as walking dogs, mowing lawns and shovelling snow; and into their teens, part-time work and babysitting are viable options. This gives kids pride and a sense of responsibility and teaches them to spend their hard-earned dough more seriously.
4. Show them how to spend wisely. Have your children pay for the things they want (or a portion thereof). They could contribute only 25 percent toward the cost of a bigger purchase, or pay in full for smaller ones. This will help them consider needs versus wants, compare prices and set short- and long-term goals.
5. Encourage postsecondary education. If your kids go to trade school, college or university, they'll earn more over the course of their lives—which increases their chances of becoming independent. Help them look into scholarships, bursaries, grants and loans to bankroll schooling, if necessary.