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Growing Up With Money: Teaching Kids The Value Of A Dollar

Children learn from what they see, including our money attitudes. What attitudes about money are you modeling for your kids?

How do you teach your children the value of a dollar? I recall a conversation with my colleague, Brian, a few years ago. He and his wife were expecting their first child. He told me they were buying a $3000 stroller from New Zealand for the baby they were expecting in 6 months.

Brian was just a rookie, and I thought three thousand dollars on a stroller plus shipping and handling from across the globe was a bit over the top! t seemed pricey for a middle-income couple.

Here are ten ways to teach your children about money

Children learn from what they see. Decide what you will demonstrate

Our children pick up our attitudes regarding money. You are the first person from whom they will learn life's lessons regarding work, self-care, what it means to have a healthy lifestyle, and healthy relationships. Are you also modeling a healthy relationship with money?

Here are some insights into raising financially wise kids!

1. Start Young and Start With You

By the second half of 2022, total U.S. household debt climbed to a record high of $16.2 trillion. According to credit reporting agency Experian the average American carries $96,371 in 2021.

If we want to turn the tide on how we manage our money, we must start with our kids. And we need to start early! Even before they can count! And it has to start with you! What is your financial vision for your family? How are you at managing your money?

2. Open a Bank Account in Their Name

All banks offer savings accounts for minors. Depending on the financial institution, you must be a guardian or trustee on the account. I still remember when I had my first bank book as a child. I can also remember the feeling of excitement in seeing my money grow.

3. Become Aware of How You Speak About Money in Your Home

Your children will inherit your beliefs about money and wealth. So what do you say about money in your home? That “there is never enough?” or “money doesn't grow on trees?” W" at are some of the remarks you make regarding rich people? That they are somehow dishonest and entitled? Question your beliefs.

What beliefs would you like your children to inherit about money? How would you feel if your children became extremely wealthy as adults? Expressing limiting beliefs about money can negatively affect your children's future relationship with money.

4. Teach Your Children Simple Budgeting

Teach your children to keep track of where it’s going. For example, use an app such as digit or mint to keep track of your income and expenses. Depending on how your children are, they may wish to download a similar app for themselves.

Label three jars; spending, saving, and sharing. If they receive allowances or money from a side hustle like babysitting or a summer job like mowing lawns, teach them how to prioritize their spending.

Budgeting is a great way to learn math besides learning about money. Even young kids can manage simple math.

5. Teach Them That Saying "Yes" to Something May Mean Saying “No" to Something Else

If they ask for a new gadget like an iPhone, discuss what they may need to say ‘" what' to afford the new device. Your income may be finite; you must choose what you will spend.

What are they willing to forgo to get what they want? For example, upgrading a bike is a great idea, but it may mean sacrificing Something else. Discuss the choices they make. It helps them create tools for increasing self-awareness.

6. Teach Your Children That Money Can Grow

As their money jars fill up, take them to deposit it into their bank account. It can be very empowering for them to see money accumulate over time when saved. An online financial calculator shows them the compounding effects of money saved.

Even with a low-interest rate on a savings account, over time, it does add up if you do not spend it! But, unfortunately, the reverse works the same — revolving unpaid debt also grows. Most credit card statements now show the impact on your balance if you do not pay off what is owed monthly. Show your teenager what happens when you don't pay the balance due on revolving credit.

7. Get Them Involved In Comparison Shopping

If they want a new bike, have them compare prices online. And have them compare prices on expenses for the house. They are part of the family and would appreciate helping you manage the household expenses.

8. Delayed Gratification Produces Success

A famous longitudinal study done at Stanford University in 1972 by psychology professor Walter Mischel found that teenagers who were able to delay gratification when they were preschoolers had better SAT scores when it came time for College.

Teach children patience by having them wait or save up for what they want. We tend to value things that require more effort to acquire. Allow them to put effort into acquiring things — through time or work.

9. Let Your Children Discover The Joy That Comes From Sharing

Social Psychologist Elizabeth Dunn, a professor at the University of British Columbia and co-author of Happy Money: The Science of Happier Spending, found that an individual's level of happiness is higher when they spend relatively more on others than on themselves. So give your children as many opportunities to experience the joy of sharing what they have.

10. Remind Them of The Things Money Cannot Buy

Have them list the many things money cannot buy, love, friendship, family, sunshine, and hugs. Cultivate in them an appreciation for all the things money cannot buy.

The joy from these last much longer than the satisfaction one gets from purchasing items. Studies show that experiences producing these positive emotions bring more happiness than ever.

Children Live What They Learn

Money should be fun! Find ways you can make the subject of personal finance light-hearted. Create a family bucket list. Produce a little about your kids' choices as to what they would like to see on the family bucket list. Expand their vocabulary around positive emotions and memorable experiences.

You may want to learn more about managing your money so you can help your children adopt healthy financial habits. Signing up for an online course on personal finance may help you feel more confident about managing your household finances.

When we think about leaving a legacy for our children, we often think about the assets we want to accumulate, like the family home, the family cottage, and our investment portfolio. And the values we'd like to teach them, Such as hard work, integrity, and kindness.

But let's also let leave them with sound financial planning principles around managing money. Set an example for your children. Pay off your revolving debt. Save regularly. Set aside a rainy day fund. Put your financial house in order. They'll probably thank you for it for the rest of their lives.

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