How To Encourage Kids and Teens to Become Money Savvy?

It can be difficult to convince a kid that you can’t swipe your credit card to get them a toy. They don’t understand the financial issues that inform the decision of buying luxury items. This is because parents do not discuss financial matters with them at an early age.

However, kids can learn to be smart about money if you teach them.  You can help them gain hands-on experience by training them using everyday situations. This article will take a more in-depth look at ways to teach kids and teens to become money savvy.

Hers’s the first tip.

1.  Discuss Money Matters Early

As mentioned earlier, teaching kids to be money savvy early enough is a great idea. You can teach them that money has value, and it goes once you spend it. Besides, it would be best if you encourage them to earn money through work. That way, they’ll know that money isn’t easy to come by as they thought before.

You can be more practical and involve them in family financial matters. Go with them when shopping, and let them swipe the family credit card. Once you’re home, discuss family credit management and the benefit of great credit scores. Also, try to keep a perfect credit score possible together as a family.

Besides, kids are more tech-savvy today, even than their parents. You can also introduce them to money management technologies. For instance, there’s AI personal credit management technology that can be helpful to them. AI-driven credit management tools can be beneficial to them even in their adulthood.

2.  Help them Set Savings Goals

Proper savings require one to set goals. This helps them to stay on track and avoid misusing the already saved funds. In addition, setting savings goals ensures that you remain dedicated even if there’s an urge to spend. As a parent, you need to help your kids and teens set savings goals for themselves.

For instance, you can ask your kid what their favorite toy is. Then let them know that they can buy it by themselves if they save a given amount for a specific period. Your kids will aim for even a higher goal once they buy the toy that they’ve always wanted using their savings.

3.  Give them Allowances

Money awareness is best built with real-life situations. The best way to teach kids about spending is to give them money and see how they use it. Start by giving them allowances and watch them make mistakes and correct them. It is better to make a spending mistake as a kid than as an adult.

But then, start by giving them small amounts that they can easily manage. Do not even try to control their spending in the background. Just provide them with the money and stay away from it. However, tell them that you will hold them accountable after a certain period.

4.  Teach them to Track Their Spending

Many adults will tell you that they don’t know where their money goes despite getting paid. One of the best credit control techniques is being able to track your spending. It would help if you taught your kids this early enough, as it will help make budgeting a breeze in the future.

Being able to track spending also saves kids from living beyond their means. It will be difficult for them to get into debt in the future if they can master this early enough. You can sit down with them and review the spending of the allowances you gave them. Look at how much they saved and what they bought with it.

5.  Be their Creditor

Credit can be life-saving when you are in dire need of something but are short on finances. Advancing it to your kids whenever they want to spend more than they’ve saved is an excellent idea. Your aim shouldn’t be to help them purchase the item but see how they handle credit.

Many adults struggle to keep perfect credit scores. Teaching your kid about debt can be invaluable. If they want to buy something, lend them some money. Then, make it clear that you’ll deduct it from their allowances. Also, don’t forget to add interest like it is done in real-life situations.

6.  Let them Make Spending Decisions

You can make financial decisions for your family, but not for your kids’ families when they grow up. It is, therefore, best to ensure your kid knows when to spend and on what. As discussed before, you shouldn’t interfere with how they spend the allowances that you give them.

Allow them to spend, make mistakes and correct them the next time they get an allowance. Giving them the power to decide and even make some costly mistakes can help build their future. It will help them grow into responsible adults who can plan their spending independently.

7.  Teach your Children to Give

Kids need to know that giving always feels better than receiving. The money they save from allowances shouldn’t only be for spending on their favorite toys. Teach them to use a small percentage of it to help friends who have financial challenges or contribute to a charity.

Giving should be top among their financial goals. This will help them grow to be mindful of others and make them know that there’s joy in giving. In the future, they’ll be happy to give without being asked to, thanks to the good financial behavior developed during their childhood.

Conclusion

Most parents have vague excuses for not teaching their kids to be money savvy. Some believe that they can’t teach their kids about money since they feel financially inept after amassing a lot of debt. But then, financial education is like anything else parents teach their kids, and there are no boundaries to what kids can learn.

Starting to teach them the value of money early enough can be helpful to their growth. But then, you should know how to do it to ensure you get the desired results from it. This article has provided some great tips that you can keep in mind when teaching kids and teens about finances.