This is a guest post written by Lauren Dzuris. Lauren runs FindMyCarSeat, a car seat website that has several brands from Graco Car Seats to Evenflo Car Seats, as well as having several tips and advice on everything from pregnancy to caring for your baby.
When we were children, we often had to ask our parents for money. We were fascinated by it, and realized it could buy us a whole lot of things once we got our hands on it. Whether you did chores around the house, saved your birthday money or you got paid for good grades, money has been something we’ve enjoyed since a young age.
If you now have children of your own, I’m sure they have the same thoughts about money. It’s important to teach your children from a young age to spend wisely and to save frequently. In order for your child to be financially independent, they need to learn these key things from the beginning.
Allowance vs. chores: Your children should have some type of responsibility once they reach elementary school. This responsibility could range from keeping their own room clean, cleaning up after themselves, putting their toys away when they’re done, or even making their bed in the morning.
It’s important that you don’t confuse this with what they do for allowance. Allowance money should be given to them weekly for going above and beyond. Whether they helped you clean up sticks and leaves in the yard, put the dishes away all week, or they vacuumed and mopped all the floors, this is money they’ve earned. They can learn the concept that hard work pays, and you can also explain to them that you work for money too.
Save: Every week when they earn their allowance, they should always know to put at least 10% of it in their bank account. Explain to them the importance of saving, and teach them to be disciplined in not spending every penny; as this is important for future life as well.
Interest: Since interest grows when you save money, it’s important you teach your child this as well. Explain to them that the more you save and the longer you save it, the more money they will have down the road, and also the more money they will have for more toys.
Some parents go as far as doubling whatever their child puts in the bank. It’s a great way for them to want to put more money in the bank.
Downside of borrowing: You want to teach your children the importance of avoiding over spending and staying out of debt. So, if they ask you for money because they already spent all theirs, tell them they can have it, but they won’t get allowance for two weeks or however long. Explain to them that they should only spend money they already have. This will teach them to spend more wisely. Also explain how when you borrow money, you end up paying more in the long run.
Having good spending habits at a young age is important, and can get you on the right path when it comes to money. Avoiding debt, saving money by being disciplined, and having money to spend when we really want to is a great feeling for anyone; so teach your child from a young age!