The lessons that we learn as children will often stick with us well into adulthood. Some of these lessons we pass on to our own children and in turn, they might pass those lessons on to their children. That’s why I think it’s important to start teaching kids, at a young age, how to be money smart. So I bring to you, part one of a ten part series on raising a money savvy kid. This first part is going to focus on how to be money smart. And hopefully with this foundation, they won’t need to know how to wipe out debt!
As a child, I had pretty decent money sense. I saved my allowance and gift money. I understood that we went anywhere, I had to be mindful of how much there was to spend. As an adult, I have decent money sense though I’ve also found myself in debt thanks to student loans and a few bad credit card decisions.
My hope, now, is to raise a money savvy kid in Squeaker so that she’ll be money smart throughout her life.
How To Teach Your Kids to Be Money Smart
What does it mean to be money smart?
There are different components of being money smart.
They include the concept of saving, of goal setting, and making your money work for you. Money smart means knowing that instant gratification isn’t always as satisfying as it might be, and saving for something you really want can pay off in ways that you just cannot imagine.
Teaching your child to be money smart means teaching them:
* About saving money
* About the importance of financial goals (long term and short term)
* How to invest their money and make their money work for them
* How to budget and allocate their money so they can pay for what they need and what they want
* How to leverage technology and systems to stay in control of their money
* That they’re the only person who can make decisions about their money
* About the practice of giving or donating to help others in need
* How to decide if they are going to spend money now or save it for later
* How banks work
* How to earn money and achieve their financial goals
These are some heavy lessons and in many cases they’re lessons that need to be learned over time.
However, when you spend the time and energy teaching your child to be money smart, they will grow up to be confident with their money. You can trust that they’ll be able to go out into the world and stay out of financial trouble.