How can you prepare your children for financial health? How can you give your children and teens a head start towards financial success?
As a parent, your children are looking to you for advice, guidance, and modeling. Young children model spending, saving, and earning habits. Teens learn financial literacy by watching what they do. You can set the course for financial success by practicing smart financial habits.
In the United States, only 17 states require high schools to offer at least one course in financial literacy. Many teenagers never really learn the basics of budgeting, managing money, communicating about finances, and assessing risk.
You can help your young children and teenagers develop good financial habits.
Here are 8 tips to get started right away.
- Grocery Shopping
Grocery shopping is something that every family does. It’s a great place to practice managing money. Because you shop often, you can show your children smart shopping skills. You can work together to make decisions and stick to a budget.
In addition, you can build good healthy habits – at the same time that you’re staying frugal.
- Get Clothes On A Budget
If you’re looking for a way to build smart spending habits, look at clothing. For young children and teenagers, explore ways to get clothes on a budget. Check out local consignment stores and resale shops.
Additionally, look for seasonal deals. It can be a great way to get savvy about style and budgeting.
- Carry Few Credit Cards
Young children and teenagers are watching how you use credit. If you manage credit, without stress, you’ll set a great example for your children. Practice carrying only a few credit cards, instead of a fully stuffed wallet.
If your kids see that you always use a specific card for gas or groceries, they are likely to follow your example.
- Make a Budget
Creating a budget is one of the best ways to teach financial management. Many parents find that this is a way to include their children in decision-making.
Budgeting can include household items, family trips, essentials, and luxuries. See how to make this engaging and fun. Get everyone involved in planning how to save for a special family treat.
- Buy What You Can Afford
It may seem like an old-fashioned habit, to buy what you can afford. However, if you help your children build this habit, they will have a positive habit for the rest of their life.
Perhaps your kids will decide they don’t need that item after all. Or, maybe they will invent a new way to earn money because they are inspired to make a specific purchase.
Either way, this habit will encourage children to be more responsible with their cash.
- Open a Free Checking Account
Open a free checking account for yourself. While you’re at it, look for ways to get your children a starter account. If your child is between 13-17 years old, they may be eligible for a free starter-checking account. Opt for a credit union that offers a free checking account to teens.
Teenagers can start managing their money and learn the basics for sound financial health.
- Discuss Options
Many families like to make budgeting, planning, and financial management a family affair. Opening up discussions about money is a way to build skills and boost financial literacy.
If you grew up in a household where discussing money was ‘taboo’ – consider how to change your perspective. Talk with your partner or spouse about making money an open topic. You may find that it helps to learn more about finances, risk assessment, and financial literacy.
If you grew up in a family where finances were openly discussed, share these best practices with your partner/spouse, and children.
- Encourage Entrepreneurship
Many children and young adults have ideas for ways to make money. It may be doing chores such as household chores, yard work, or childcare. They may have a natural inclination for starting a local business such as having a lemonade stand, doing craftwork, selling berries, or building an app. You can even start ventures as a family depending on your child’s age and interest, this could be something like throwing a tournament at your local soccer field, starting an amatuer trading account for stocks, or even pitching in as a family unit and flipping a house!
In many communities, some programs encourage young entrepreneurs to make their ideas real. Do a quick Internet search to find programs in your city or community. For instance, in San Diego, the San Diego Financial Literacy Center offers programs to help people achieve greater financial health.
Encourage your children to learn the skills for running a business. It’s never too early or too late to build entrepreneurial skills.
Take charge of building financial literacy for your teenagers. With these simple tips, you can get started today.