You might have read young adults and students fresh out of college complaining about their debt and financial struggles online. Whenever they express their financial frustrations, they never miss criticizing their education system. The critique is always the same that the education system has failed to tell them how to move in society and manage their finances.
What they fail to realize that their financial lessons began when their parents asked them to save money in their piggy banks in their childhood. Moreover, this isn’t the only lesson on saving your parents might have given you in the early days of your life.
Parenting is a challenging phase of your life, and one feels unaccomplished even when they are doing the most for their children. If you don’t want, your kids to experience the difficulties of adult life, then try to teach them the importance of money and financial management from the start.
Prepaid cards for kids are another way of showing your kids that you see your money saved in their hands.
We have compiled a list of things you can do to teach your children to financially responsible:
Start from the Savings
Let’s start from the basics, and we are all familiar with the idea of saving because of piggy banks. The lesson in this practice is to reduce the dependency of kids on their parents by asking them to wait and save for their needs by themselves.
If your kids want you to buy the latest version of their video games or a new comic book, ask them to reduce their daily expenses to achieve that goal. They might have to forgo eating some of their favorite snacks to save money, but that’s how you’ll teach them to be responsible.
Children are habitual of getting what they want by using one of their many tactics. The journey from childishness to maturity faces many trials and errors, but that’s what makes it that much more memorable.
According to Freud’s theory, a child starts their life with the ID phase during which they want to fulfill their desires immediately. From changing diapers to being fed, all they care about is the fulfillment of their desires and the completion of their demands.
Then as they grow old, their EGO becomes stronger each, and they learn to adjust with the circumstances. It is when they become one with their reality and behave accordingly.
Financial responsibility is easy to instill in an individual when their EGO is stronger than their ID. It is productive to tell them the consequences of their actions when they don’t spend responsibly during this phase.
Allow them to Earn
A lesson on savings won’t be complete if your kids don’t have any money to save, to begin. Allow them to earn money by using their creativity and talent. We’ve all seen kids setting up lemonade stands to earn some bucks, but that’s only the tip of the iceberg.
There are plenty of ways for children to earn money without doing any hard labor. Moreover, online market space has made things a lot easier for the new generation. YouTubers like Zoella and Joe Sugg started earning money by making videos online when they were in middle school.
For instance, one can market their talents like drawing by doing commissions and selling their artwork. Not only this, many singers, actors, and artists have started their careers from Youtube and other sites; Shawn Mendes, Dylan O'Brien and Justin Bieber are to name a few.
Give them Control
Another way to make your kids responsible financially is by giving them real money to manage. For instance, many people open joint accounts with their kids to tell them that they have real money in their hands. It is a subtle way to show your kids that you see them as a responsible individual and trust them with your money.
Earlier, people used to make their kids authorize signers on their prepaid cards to achieve this goal. But banking has evolved a lot recently, so does the ways of parenting.
Getting prepaid or debit cards for your kids is an effective way to teach them about the threat of piled up debt and late payments without burdening them extensively.
Budgeting is Important
Everyone knows how crucial budgeting is when it comes to finances. It can make and break your financial standing by making your expenses spiral out of control. Lack of budgeting is what drags an individual in the debt pit in most cases; therefore, teaching your kids how to budget is a crucial financial tact.
You can give your kids a fixed allowance weekly and keep extending the period as they grow old.
Reward & Punishment
Another lesson that can be proved to be effective would be letting them know about the consequences of not paying their bills. Keep them involved when you file and calculate your monthly expenses and bills.
They might not know what some of the terms you use mean, but you can still teach them what happens if an individual fails to pay their bills. Make them sit in front of you with the calculator and do the calculations for you. This way, you are not only teaching them finances but making them practice their math too.
Show them the Value of Money
It might seem daunting but try to associate your kids’ daily errands with money. In doing so, do not make them think that they can’t do anything free for you. Create a balance between both notions and don’t let one exceed the other.
Take your kids for grocery shopping with you so they’ll know the pricing of each item they use or eat every day. And this will teach them to think before spoiling and wasting anything without any remorse.
A Lesson on Philanthropy Might Help
A good way to teach your kids to use their money wisely is by making them help the needy. They are taught to help the less fortunate by giving away their money and time. You can sign up your kids for charity organizations and volunteer work as a lesson on compassion and comradeship.
Many will say that giving kids control over their life and finances might make them rebel against their parents more often and turn into delinquents. That is why giving them control is not enough; you need to respect their decisions and choices as well.
Talk to them about the best possible alternatives to tackle a certain problem instead of forcing them to do things your way!