Financial Facts of Life

Financial Facts of Life

We can all use a little financial guidance from time to time, but teaching our children about money management can be a challenge. Following these simple guidelines can help your children learn the financial facts of life.

Be a role model

Set a good example with your saving and spending habits. Getting your children involved in money management activities will also teach them how to make wise financial choices. Learning by example will lay the foundation for how your kids manage their money long-term.

Start a savings account

While a piggy bank is a great start to smart saving, consider helping older children open a savings account. Not only will your child develop a saving habit, but he/she will also begin to learn what banking is all about. As children move into their teens, discuss the concept of investing and the various options, such as stocks, bonds and mutual funds.

Give an allowance

An allowance can be a great way to teach your kids about money management. Encourage children to decide in advance how much to save and how much they can spend. Allowing children to make spending and saving choices helps them learn from their mistakes without losing too much in the process.

Putting it into practice

Part-time jobs can teach young people valuable business skills and personal responsibility. Earning a paycheck allows teens to experiment with cash flow. This is a good time for your child to open a checking account and learn the concept of balancing deposits and withdrawals. It’s also an opportunity to make your child responsible for certain expenses, such as gas money or contributing to his or her college fund.

Helping your children learn the financial facts of life at an early age can lay the foundation for a lifetime of smart money management.

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