5 Financial Lessons To Teach Your Kids - Money Tip Tuesday

How many times have you ever said to yourself or someone else, “I wish I knew this sooner?” When it comes to money, sometimes the hard lessons are best learned early. If you have kids, or work with kids, there are important financial lessons they can benefit from starting at an early age.  

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Transcript: 

Welcome to Money Tip Tuesday from the Making Money Personal podcast. 

Financial education is important for all ages. The earlier you understand important financial principles, the better off you’ll be as you grow up.  

It’s never too late, but if you’re a parent, you may be thinking you can help spare your kids from making the same financial blunders you did. 

Not to mention just getting a habit started early can make the difference in a child’s life when they become an adult.  

There are important financial lessons you can teach your kids at a young age to set them up for financial success well into adulthood.  

Teach them the importance of saving.  

Saving is an important financial discipline that everyone should practice.  It gives you purchase power, the ability to help others and helps you provide for your needs and the needs of your family. Getting started earlier is always better so try to start instilling this discipline in your kids' lives early. There are a lot of different ways to do this, so choose which is the best way for you and your kids. 

If your kids are old enough, you can start by implementing an allowance. If they get birthday or gift money you can encourage them to save some or all of it. You can also set up a system for them to make some money at home doing chores. If they’re still young, get them a piggy bank or make one with them so they can store all the cash and change they collect. If they are a little older, show them the envelope system as an early budget tool so they understand the process of dividing money up into portions for specific uses. 

Finally, set up a Kids Club savings account for them so they can learn what a bank account is, how to deposit money, and use a coin machine. 

Teach them the importance of working for money.  

As a kid, when I was too young to work a job, my parents encouraged me and my siblings to do chores for cash. This made their lives easier and gave us the opportunity to understand the importance of trading certain working skills in exchange for money. Try organizing regular chores for your kids like vacuuming, cleaning, trash duty, car cleaning, yard work and others. It gives them the opportunity to collect cash for their own use and gives you a break from some of the common household chores.  

When they grow old enough to have their own job, they will understand that trading time for money is productive and beneficial.  

Teach them to build knowledge  

Encourage them to learn about important money principles when they can. Find ways to get them engaged with money challenges, apps and other games that they might enjoy. Share age-appropriate financial resources like activity books, videos, games and more. There are a lot of finance professionals who create kids and teen related courses that your kids may be interested in and enjoy using. 

Teach them the importance of giving 

When I was young, my parents used the envelope system to teach me about budgeting. They made it clear that you can only do three things with money – save it, spend it and give it. This taught me that when we give money, we can make a difference in other people’s lives. It’s important to learn to spend and save money wisely, but it’s just as important to give money. Teach your kids why it’s important to give so they learn they have the power to use their money to benefit others. It can instill virtues like gratitude and generosity.  

Teach them that personal finance is a journey that you’re also working on. 

Depending on how you manage your own finances, this may be one of the trickiest. A great way to help somebody learn is to show them real world examples as they live them. Whether you like it or not, your kids are watching how you handle money, and they learn from it. Lead by example as you navigate your own journey. If you’re paying off debt, show them what you’re doing. If you’re saving money for retirement, or something else explain to them why it’s important. They see and feel the benefits and consequences of the financial decisions you make so you may be one of the biggest financial influences in your kids’ lives until they reach adulthood.  

Make sure that you are practicing what you preach so your kids will have a clear example of what good money management is like. You know that personal finance is a lifelong journey, and you’re on your own just like everybody else. Your kids will be there one day too. As they watch you save, spend, get out of debt and give they’ll learn the value of discipline, patience, and perseverance for their own financial journeys. 

If you have any comments or ideas for additional tips, please email us at tcupodcast@TriangleCU.org. Be sure to follow the Making Money Personal podcast page on Facebook and IG for more great content. 

Thank you to our sponsor, Triangle Credit Union, and to you for tuning in!  

Have a great day everyone!