Now that it’s summer and schedules are more relaxed,
it may be an ideal time to talk to your children about money. Your tween may be
making some extra cash from picking up odd jobs around the neighborhood or your
teen may have gotten his first job.
While I certainly admire their hustle and the
excitement of earning their own money, as parents, we must pump the brakes and
teach children the importance of how to budget their earnings before it’s all
spent on ice cream, soda, pizza and video games.
Budgeting is a valuable
life skill that if learned at a young age, before juggling adult responsibilities,
are less likely to have teens land themselves in debt later in life.
It is also important to
teach the “Earn, Save, Spend, Give” model to children so they understand that
money has different purposes and to think outside of just spending it. Earnings
should be divided into categories, a portion for future goals, spending on
things we need or want and set aside a little to give to charity or others in
need.
Utilizing these tips
can help your children see what you, as parents, spend money on and by introducing
their financial buy-in will put them on the path to be money savvy adults.
Help
with the Bills. Extra-curricular activities, sports and
school supplies are expensive. Asking your child to kick in some money towards activities
they want to participate in is not extreme, but it will make them pick and
choose what is most important to them.
Set
tangible goals. Is your son or daughter saving for a big-ticket
item? Have them set aside a certain percentage of each paycheck to that goal.
As an incentive, you can offer to match their final savings amount, so their
savings goal is more attainable.
Give
a Little. As hard as they work, teach the importance of
humanitarianism. Let them choose a charity they feel strongly about and set
aside 10% of each paycheck for the cause.
Let
them eat cake. It shouldn’t be all work and no play. Build
fun into the budget to allow for small treats every now and then.
There are several apps to help children learn about
budgeting, some examples: Rooster Money, FamZoo, Greenlight, and
GoHenry. These programs teach everything from allowance management to chore
charts to savings goals to financial literacy in a fun and engaging way.
Make budgeting a game so it doesn’t seem so daunting.
By involving children in money matters at an early age provides valuable life
lessons that will grow with them as they enter the workforce and will provide financial
success in the future.
