For decades, talking about money with children was strictly taboo. If you grew up in a household like this, you could be one of many adults living with debt and struggling to learn better financial habits.
Now could be the perfect time to expand your journey towards better money management and involve your kids. Here are three lessons that can help them be more financially savvy as they grow into adulthood:
1. How To Make Money
Teaching children how to be financially self-sufficient can start as soon as they’re old enough to run a vacuum cleaner. Instead of allowances, pay kids for the chores they do around the house so that they can appreciate that money doesn’t grow on trees (or parents).
Take this lesson to the next level by opening a basic statement savings Newark NJ bank account. Spend one day per month balancing checkbooks and statements together as a family.
2. Why They Need To Start Investing Now
A few years later, after your kids start getting excited as their bank balances grow, it’s time to present the wonders of compound interest. Help them use a portion of their savings to open an investment account, so they can get a head start on financial independence. Make sure they understand that investing isn’t about playing the market; it’s about putting idle money to work, and now is typically the best time to start.
3. Why They Must Avoid Debt
Perhaps you are one of the lucky ones who has successfully conquered debt and can give first-hand evidence of how freeing the experience is. If not, you may be in an even better position to help your kids understand the many ways that living in debt is usually not worth the objects it has purchased. While some credit is generally necessary in today’s world, money spent needlessly on credit card interest payments could undoubtedly go to better use.
Financial responsibility is a journey and a lifestyle. Include your children in your own endeavor to manage money; the best habits are generally learned early.