Five Important Financial Habits to Teach Your Teen
Children often learn simply by going about their young lives and absorbing everything the world has to offer, like a sponge absorbing water. As kids spend a majority of their time with their parents, it falls on parents’ shoulders to instill healthy, positive habits within the minds of their little ones. But one life lesson that often gets overlooked is how to manage money, in other words the financial habits.
According to a 2013 study from the University of Cambridge, kids begin to learn “finance behaviours” by the tender age of seven. So even if you’ve never said a single word to your child about money, chances are that he or she has already picked up on your own spending habits from mere observation. If you’re not quite sure where or how to start that conversation, we’ve got you covered. Here are five financial habits that all kids should learn by the time they become a teen.
Lesson one: money doesn’t grow on trees. Though this may seem obvious, kids tend not to concern themselves with the troubles of adulthood. Your child should understand that you go to work in order to make money, and that currency is not unlimited. An easy way to implement this in your child’s life is by offering them an allowance in exchange for doing household chores.
Lesson two: don’t spend it all in one place. Sticking to a budget can be difficult for even the most frugal adults, so
you’ll want your kids to start practicing as soon as possible. When they realize their weekly allowance can’t buy them a movie ticket, a candy bar, and a new video game, they’ll learn firsthand the importance of spending wisely.
Lesson three: patience is a virtue. In the age of the Internet, instant gratification is at the touch of our fingertips, and kids are used to getting exactly what they want when they want it. But teaching them how to wait before they buy will help them begin learning how to avoid debt
from impulse buying as well as how to wait for bargain prices on their favorite items.
Lesson four: set a goal. Help your child buy that brand new toy by showing them how to save their money. Set them up with a notebook where they can keep track of how much money they’ve accumulated. In no time, they’ll be feeling the gratification of reaching their goal by
buying what they like with their own hard-earned cash.
Lesson five: communication is key. Certain aspects of the real world aren’t always explained clearly to children, such as taxes or tipping. Work on clarifying these things in a manner your kids will understand so they can move into young adulthood with ease. There’s no doubt that every parent wants nothing more than to set their children up for success later in life. Follow these five tips to ensure your kids begin to practice good financial habits while they’re young.