When you teach kids about money, it surely lasts a lifetime. And like most important lessons, it isn’t just what you tell them to do, it’s how they see you operate every day. The values you demonstrate will shade and shadow your kids’ money behavior for the rest of their lives. And it starts early. Kids are like little sponges who absorb everything (like repeating that four letter word that just slipped out of your mouth). So rather than letting your kids ONLY learn by example, consider these seven conversations to help your kids learn how to make money work for them: 1. Money is just a tool. Having money is not an objective by itself, but a means to live your life with options and a sense of security. This is a great lead-in to talk about work and what it takes to make money. 2. The Money Game: First you save, then you pay your bills and then you can use your money to help others or treat yourself. Try playing the money game as a family and create shared goals. 3. No shame, no blame. There are those who show their wealth readily and steadily, leaving your kids to feel “less than”, while others seem to have less than your family. Talk to your children about richness and success being about the shared values of your family, not about acquiring things or judging others. 4. Money doesn’t buy happiness. The goal of money is to give you options and a measure of security. Help your kids see that handling money wisely means they can help make their dreams happen. Showing them balance—of what they need/want today vs their hopes for the future—can bring them closer to happiness. 5. Bad stuff happens. Sometimes people lose their jobs, they make money mistakes or their plans don’t work out the way they expected. It’s not the end of the world and we must get back up after being knocked down. 6. Goals matter. What do your kids value—learning to play the piano, acting in the school play, going to college to become a fill-in-the-blank? Show them that not only are goals important, but they’ll need a plan to work toward what they want. 7. Success takes effort. There is no true “overnight success”. It will take work, persistence, time and patience to achieve your goals. Think of these conversations as fire-starters. Whether you have them around the kitchen table, in the car or while couch surfing, your goal is to make them aware of how money works. And then, you’ll want to lead by example. Because your kids will usually instinctively decide (without much conscious thought) to imitate YOUR saving and spending habits. Your normal becomes theirs. Your frank conversations and the examples you set can be the difference between success and a life of money difficulty. It’s far easier to give them the gift of good habits now, then watch them attempt to unravel money misery later.
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If saving and managing your money sounds boring, then get creative with it! Spice up your money management habits with these quick and easy money saving ideas. Make saving and managing your money a fun adventure you look forward too. Here are a few ideas to get you motivated.
1) Start with your morning cup of Joe… We’ve all heard this money saving tip before, brew your coffee at home instead of going to Starbucks or Caribou every day. The reason everyone says this is because it really will save you over $1,100 a year. That’s a nice chunk of change! But it doesn’t have to be as boring as it sounds. Make it fun by trying out several different coffee brands and flavors to find one you absolutely love! My personal favorite is called Highlander Grog from a Minnesota company called Cameron’s Coffee. Now my morning is not complete without it! And no, I was not paid to say that. 2) Just stay home If your family is one that likes to get out of the house every weekend, that can add up to a lot of extra money spent. Try a “No-Spend Weekend” each month, where you take what normally would’ve been spent going out and put it towards your savings. You can use this savings to go on a big family vacation later. Plus, it forces you to get creative with your activities. Make a treasure hunt for your kids, build an obstacle course, do arts and crafts, bake cookies, play board games, or just chill and watch movies together. 3) Budget weekly, not monthly Sometimes looking at your monthly expenses can feel overwhelming. Instead, try splitting your payments over 4 weeks instead of monthly. It can be easier to budget for $250/week than $1,000/month. This also can help put your expenses into perspective. This is an easy way to start a budget too. If you only make $500 a week, but your expenses are $550 a week, you know you need to cut back by $50 a week. That can be a more achievable goal than cutting $200 a month, even though at the end of the day it’s the same thing. Sometimes you just have to trick your brain. 4) Create inspirational passwords Make your passwords to your accounts a financial goal you want to accomplish, and then whenever you login you’re reminded of the goal you’ve set. For example, BEdebtFREE!2018 is not only a secure password it’s also an excellent goal to set for yourself. This is an easy way to help keep yourself motivated to achieve your financial goals. A few other ideas: Vacation2019! #SaveMore2018 !NoCreditCards2018 5) Set regular reminders for your goals Set up a recurring weekly reminder on your phone or work calendar that pops up to tell you to “Save Money” or “Payoff Your Debt”. This will help keep your financial goals in the front of your mind with little effort on your part. Once your meet your goal, just change up the message! This is probably one of the easiest ways to keep yourself motivated to achieve your financial goals. 6) Play with your kids There’s a great saying “realize that what your children want most of all is your time, not your stuff, and you’ll find money in your pocket and joy in your heart”, this is so true. Research consistently shows that the more time you spend with your children the better behaved they will be. This is because your kids want nothing more than to have your undivided attention. This is good news for your wallet! It means you can skip the expensive toys and focus on quality time together and don't forget to give financial education to kids. 7) Don’t accept the status quo Did you know if you’ve been making your credit card payments on time, you have the right to negotiate your current interest rate with your credit card issuer? It’s true! But, a credit card company will never lower your interest rate automatically; you have to ask for it. If your financial situation has improved since you initially opened your credit line, then call them and ask for a better rate. If they won’t lower it, then start looking for a better credit card option. 8) Be a money savvy gamer Video games are fun, but can get expensive when each game is around $50 each. To help save some money on your gaming habit, buy video games that have a lot of replay value and don’t buy new ones until you’ve mastered what you have. Plus, you can trade in your old games and buy used ones at places like Game Stop to save even more. You can even try out online game streaming through Steam, they have sales on great games all the time. You don’t have to give up your favorite hobby in order to save money; sometimes you just have to get a little creative in how you get your gaming fix. 9) Save energy, save money Anytime you’re are cutting back your energy usage, your saving money, plain and simple. One easy way to save on your energy cost is with energy-efficient light bulbs, like LEDs or CFLs. Some people shy away for these because they cost more initially, but they have a longer life than incandescent bulbs and use far less electricity, saving you money long term. The best part, is you can change them out in your house as your regular bulbs burn out. This way you are not having to spend a lot upfront to make a big impact on your energy bill. Teenage is the age when children experience sudden changes physically and mentally. Children, as well as parents, find it difficult to cross this stage without having bad experiences. It is this stage when children start to yell at their parents and consider them as rivals rather than facilitators.
1. Advise Your Teen to Make Some Money Advising them to be in a job doesn't always mean to ask them to make both ends meet. Advise them to earn a little money to understand the value of money. This will help parents prevent their children from wasting the hard earned money on frivolous and unimportant things. This will also help the teenagers to plan for spending and saving. Thus, you can inculcate in them the importance of saving money. 2. Give an Idea about How to Prepare a Budget When they start earning, give them a basic idea of preparing a budget. Explain to them how making a budget is useful. Help them to figure out unnecessary expenses and where they can save money. Quote examples from your own life whenever possible. This would help them to understand better. 3. Help Them to Set Financial Goal By providing financial education to kids and making them understand their priorities in life, you help them to fix financial goals which would ultimately help them to lead a disciplined life. Setting up a small portion of the money to buy a good laptop in the future would help them to satisfy their needs from their own money which they have earned after putting in lots of efforts. 4. Ask Them to Start a Savings Account I still remember the days when we had a savings account in our school itself. Wow! It really feels like heaven to think about those days when we were allowed to control our own money. In a way, it is helpful to your parents to pay for the children's school fees in case you allow your child to have some money in their savings account. Awesome, isn't it? 5. What about Redbox and Movie Stop Instead of Going to a Theatre? Your teen can save a little money by renting DVDs in Redbox or Movie stop instead of spending a lot of money in the theatres. I am pretty sure you can watch a movie at the lowest prices like $5. Think of booking movies in advance, you will get to watch movies at the cheapest rates. 6. Cultivate a Habit of Reading You can help prevent your child spending money unnecessarily by cultivating the reading habit in them. Let them start reading small books in the beginning. Parents will always have money to buy good books for their young ones. This will open up a new world of knowledge to the teenagers. While you may not have control over the economy, you do have control over the actions that you take and action starts from home. So it is necessary to provide proper financial education to children which would ultimately help your kids only to have a brighter future ahead. Following are 10 ways to manage finances:
The Internet is the biggest collection of information in all of history. You can find information online about almost anything, from cooking to computer programming to managing your money. Adults can use online personal finance courses to learn about budgeting, building credit, and investing for retirement. The Internet also has a wide array of apps to provide financial education to kids. With fun facts, games, and videos, these sites present financial information in a form children can understand. In fact, many of them are so much fun to play with, kids won’t even realize they’re learning at the same time. 1. Wallit The free Wallit app takes PiggyBot and Bankaroo’s features to the next level. You can use it not only as a virtual tally of allowance money and financial goals, but also for real-world spending and saving. And it’s for whole families to use together. Unlike PiggyBot and Bankaroo, Wallit is linked to a parent’s checking or savings account, so they can transfer real dollars into the account. If a teen has a bank account of their own, they can transfer money from Wallitt into it. If not, they can use the money in their Wallit account to purchase gift cards for top retailers. However, they can’t spend more than they have in their Wallit account, so there’s no risk of overdraft fees. Family members can use Wallit for more than just transferring money. For instance, parents can use it to assign specific tasks, such as chores, to other family members, and pay for them when they’re completed. Users can set financial goals with Wallit, allot money toward them, and track their progress. Wallit can teach kids and teens about saving, spending, budgeting, and goal setting, while also giving them hands-on access to their money. 2. BusyKid The BusyKid app offers a lot of features for both parents and kids. For starters, it serves as a digital chore chart. Parents can add chores to a list and set a fee for each one, and kids can log on to select “I did it” when they complete one. As soon as the parents confirm the chore was done, they can immediately transfer the payment for it from their bank account. They can also use the app to pay their kids a regular weekly allowance. Kids can use their earnings in BusyKid in a variety of ways. They can save the money, donate it to a charity, select “get cash” to request a cash transfer from a parent, or load money onto a bank-issued reloadable prepaid card for spending. Most intriguing of all, they can choose to invest their funds in stocks — yes, real ones — for companies such as Nike and Netflix. If this sounds like a little too much responsibility for children, don’t worry — BusyKid provides a safety net. Parents get the final say over any transfer of money into or out of the system, from allowances being paid to money being donated to charity. The app sends parents a push notification each time a kid uses it to transfer money, and parents simply respond to it to approve the transfer. There’s no monthly subscription fee for BusyKid, but there are a variety of other fees users may encounter if they’re not careful. For instance, users pay a fee to transfer money between cards, transfer money from a card to a bank account, request a paper statement, or order a replacement for a lost or stolen card. Also, kids can be charged a declined transaction fee if they attempt to use their prepaid cards before funds have been loaded. 3. FamZoo Another app families can all use together is FamZoo. This app bills itself as a “virtual family bank” in which parents serve as the “bankers” and children are the “customers.” Parents get to set their own rules for the family bank, including:
Parents and kids can use FamZoo to keep track of allowances, chores, spending, saving, and giving. They can also make instant transfers to other family members at any time. Kids can see only the money in their own accounts, while parents can see the balances for all members of the family. Any member of the family can use FamZoo to set a savings goal and monitor progress. The app also offers other features, like to-do lists and shared wish lists for gift ideas. There are two separate versions of FamZoo. The IOU account is virtual-only, like PiggyBot, while the prepaid card account includes prepaid cards for all family members and the ability to move money between cards with no fee. Both accounts charge a $5.99 monthly subscription fee. Famzoo is available for iOS, Android, and as a website that works on any device. 4. goHenry Designed for kids between ages 6 and 18, goHenry is like a debit card with training wheels. The service provides kids with their own personalized, reloadable cards, but their parents get to decide how the children can use them. Parents can transfer their kids’ weekly allowance to the card and also add tasks the children can complete to earn extra cash. Kids can then use the card like a debit card — within limits. Parents can manage their kids’ cards through the goHenry app, and all their children’s spending takes place under their watchful eyes. For starters, parents can receive notifications about how much their kids spend and where. They can set limits on how much their kids can spend in a week, how much they can spend at one time, and where they’re allowed to spend it — in stores, at ATMs, or online. And they can instantly block a card completely if it gets lost or as a form of discipline. The goHenry app is available for iOS or Android. There’s also a Web-based version that works on any device. There’s a $3.99 monthly fee for the service per child. 5. Toshl Finance Unlike the other apps on this list, Toshl Finance isn’t specifically for children or families. It’s a perfectly useful budgeting and finance app for adults, but with a design that’s also appealing to teens. Toshl Finance works kind of like Mint and its competitors. It monitors the balances from your bank and credit card accounts, allowing you to track all your income and expenses in one place. You can use it to:
All this is pretty standard stuff for a budgeting app. However, Toshl Finance makes it more fun by adding colorful cartoon characters that pop up to offer tips and tricks for money management. The Toshl Finance app comes in several versions. Basic Toshl is free, while Toshl Pro charges a fee of $2.99 per month (or $19.99 for a full year) in exchange for more advanced features, such as the ability to track more accounts and create more budgets. The priciest version, Toshl Medici, can sync to your bank accounts automatically, so you don’t have to enter balances by hand. It costs $4.99 per month or $39.99 for a full year. Toshl Finance is available for iOS and Android. There’s also a Web-based version you can use on any desktop computer or tablet. For many of us, we learned the importance of saving money the hard way through trial and error. Given the value financial skills and knowledge plays in navigating life successfully, it’s surprising this isn’t a common subject taught in schools.
When it comes to saving money, us parents could use some financial education ourselves. According to the Federal Reserve Bank of New York, as a whole, Americans owe $13.5 trillion in debt as of late 2018; some of the largest categories include $1.5 trillion in student loan debt, $1.3 trillion in auto loan debt, and $225 million in credit card debt.1 In order to help the next generation avoid these similar mistakes, it’s incredibly important to teach kids about money essentials. Below are some tips and tricks you can use to prepare your kids to spend and save money wisely:
As parents, we can empower the next generation by teaching proper money management to kids at a young age. Although talking to your child about money may seem strange, it isn’t; it is essential to help shape strong financial habits for their future. How to save for a goal
Instead of thinking of money as something you either have or don’t have, show your kids how they can save for something specific. This will teach them that instead of treating money as an elusive creature that disappears and reappears randomly, that they can have some control over their spending. How to teach it: Introduce "the envelope system" to your children at an early age. This is a great way to teach your kids to save and how money works. You can start by designating separate envelopes, jars or piggy banks for saving and spending. Once your children get more comfortable with this method for saving, you can add more envelopes into the mix for giving and several different goals, such as a toy they really want or a souvenir fund for a day trip to the zoo. Children need to realize that once their money has been spent, there is simply no more. This way they realize that there is a value to their money, and that they need to spend it wisely. It’s also a good opportunity to use basic math, such as adding and subtracting, to figure out how much they’ll need to save. By helping your children get more comfortable with numbers at an early age, they’ll be better equipped to get their heads around more complex concepts, such as how interest and loan repayments work, when they’re older. If you’re a member of a credit union, you can open a joint account with your child to get into the habit of saving money. You can contact your local branch to get more information about opening an account. How to earn money Instead of handing out money to your kids, teach them how it can be earned. You definitely don’t want them to treat you like the Bank of Mom or Dad. By teaching them how to make money, they’ll understand the value of money and how earning it leads to self-sufficiency, independence, and resourcefulness. How to teach it: When your kids are ready to receive an allowance, talk to them about what housework you’d like them to do in exchange for their allowance. How often will they receive an allowance? As a parent, it’s important to be consistent in how often you “pay” them. That will help them learn how the flow of money works, and how to budget accordingly. Ask them what they plan to use the money for, and give them tips and ways they can save money for future goals. Get your kids excited about finding other ways to earn a buck. Have a yard sale, set up a lemonade stand, have them help wash cars. How to spend smart Show your child how they can make the most of their money, and to also spend in a way that adds the most value to their life. How to teach it: This can be taught with everyday life lessons. Trips to the grocery store are a great time to teach them how to shop for value. If you can afford the time, do a quick comparison together in the cost and size between two different jars of pasta sauce. Which item will they get the most bang for their buck? Will your family end up using all the sauce? If not, maybe it’s best to get the smaller-sized jar. How to decide between needs and wants This is an essential lesson, and the earlier your child learns this, the better. Understanding the true difference between what they really want and need will help them make better decisions with money. It will also teach them about delayed gratification, buying based purely on emotion and curbing their impulses. How to teach it: When your children ask you for something next time you’re out shopping, ask them if they really need it or just want it? Is it something they can do without, or would it be really hard to go without this item? This can be treated like a game to provide financial education to kids. Also, try playing a game with them where you don’t buy the item, and see if they remember about it in a week or so. I also recommend the Money Mammals’ Needs Vs. Wants app, which helps your kids learn about this fundamental money concept through fun games. How to share their money Our attitudes about money are formed at an early age, and a lesson on how giving their money makes a difference in the lives of others and the world is a powerful one. How to teach it: Create a savings jar specifically to donate to a cause they care about or save up for a gift for sibling or classmate. Another idea is to devote a savings jar for gifts. It’s also a prime opportunity to teach them how to be resourceful and get creative with finding different options. Talk to them if they would rather volunteer or make a gift instead of spending money to buy one. This will show them that there’s a clear trade-off between their time and money. How to borrow responsibly While this is a somewhat complex topic, teaching your children the ins and outs of borrowing money and how to do it responsibly is something that will serve them well throughout their lives. How to teach it: You can offer to give them a loan for a bike or computer if they save up for half on their own. Sit down with them and do some research on how much something costs, and if they can get it on sale. Your kids should fully understand the discomfort of the loan payments, interest, and opportunity cost that comes with debt. If you feel comfortable doing so, talk to your kids about how you borrow money and how it affects your life. Having debt, after all, is a part of life for most grownups. Do you have an auto loan, or mortgage? What does it mean to have a loan? What are you responsible for? Financial education for kids is just as important as for adults. In fact, many say that it’s much more important, and it’s hard to argue with them. If a child can be educated on the proper way to manage finances for their entire life, this can go a long way to secure the future of the child.
Teaching your kids to be financially literate helps them understand how to manage money as they grow. Wise spending becomes a habit, and this is so important for every single person, no matter where you’re from. Learning Through Games When we’re old, we already have many things that we learned and life moments that influenced us. When we’re children, we start to learn what life offers. Everything that we learn as children is going to carry with us for our entire lives. This is also the case when it comes to financial literacy for kids. Some say that kids and finances don’t go together since a child might not be capable of learning something so complicated. But this is simply not true. Children can easily learn about money management through games presented by parents, educators, and even online. Learning The Basics Although financial education for children is something that can be highly complex, what is important is that a child learns the basics. This includes good practices about money, savings, and even the basics of investing. While financial education can benefit from a qualified instructor, a lot of material is already available online that covers all the basics. Money management for children is normally the focus because this is what leads towards understanding more difficult concepts. Children learn about the role of a bank and also about online transactions and credit cards. Learning Through Videos In the past, it was not as easy to teach financial education since the options that were available in terms of teaching materials were limited. This changed as technology advanced. It’s important that you focus on taking advantage of technology with children. Kids are so much more receptive to new learning mediums. For instance, the use of online videos that help teach financial education to children is highly recommended. Live lessons are also available, given in stages. Introductory levels normally deal with money as a general topic and why it’s important to save, while advanced topics teach children what to do in more complex scenarios. There are even lessons that teach parents how to handle financial education for children, helping you when it comes to providing an allowance. Conclusions Financial literacy is very important for children as it will prepare them for a bright financial future. All parents have to be sure that children know as much as they should about cash and other related financial topics. All parents want a happy future for their children, yet not enough moms and dads teach their kids about financial literacy, a key component of happiness. Money management for children can change their lives for the better. Start with simple money lessons in elementary school and up the ante with teenagers, because in just a few years they’ll be off to college or moving out.
Here are six lessons that will help prepare them to be independent and self-sufficient when that time comes. Encourage Earning Help your kids understand that money doesn’t grow on trees by encouraging them to earn their own cash, rather than relying on you for everything. For younger children, set up an allowance in exchange for household chores. Investopedia says this helps them learn “the value of their hard work.” As kids grow, suggest that they explore neighborhood jobs, such as lawn mowing, dog walking or babysitting. Once old enough, talk to your teen about the advantages of a part-time job:
Create Budgets Starting with their allowance and continuing with side gigs and part-time jobs, show your teen how to create and manage a budget. Using a spreadsheet, get them to enter any cash earned along with any cash outlays, explaining that they can’t spend more than they earn. CNN Money recommends making teens “responsible for funding part of their lifestyle to help teach the value of money.” Entertainment is a good spending category for this. If they want to go out with friends, it’s on their dime. This is also a good way to teach them about wants versus needs and delayed gratification. For example, if they want the latest video game that costs $50, they might have to mow the neighbor’s lawn quite a few times before they can afford it. Open a Bank Account Financial institutions play a major role in our lives. Help your kids understand this and help them get used to interacting with banks by opening a checking or savings account for them once they’re earning their own money. Until they are of legal age (typically 18), your child’s bank account has to be in both of your names. If the joint account is a checking account, you can tie a debit card to it, which can be a practical tool in teaching them how to manage their money. High school is a good time to consider getting your teen a debit card. Help them get in the habit of reviewing their monthly statement, and teach them how online and mobile banking work. Promote Savings A recent survey indicates that 58% of Americans have less than $1,000 in savings. Help your teen avoid this fate by teaching them to save some portion of every paycheck. A good rule of thumb is the 50-30-20 rule:
A key reason to promote savings, as noted by Parent Toolkit, is that it “allows them to have money, even when they don’t need it, as opposed to needing it and not having it.” Explain Credit Plastic is not free cash. Teach your teen that lesson and they will thank you later. Explain the following:
Before your teenager goes to college, help them get a credit card. Such accounts co-signed by parents have small credit limits, helping teens safely learn how to manage credit and begin building a credit history. Discuss the Future The ultimate goal of financial well-being is building a more secure future, and that involves planning. Teach this lesson by talking to your teen about college affordability long before they apply to schools. If they’ll need student loans, encourage them to factor that into the decision about which school they’ll attend. Get them to research the future earning potential for their desired major and weigh it against the cost of tuition and possible student loan repayment obligations. Bottom line, parents who teach their kids about financial literacy are setting them up for a happier and more secure future. |
AuthorHi! I am Tim Connolly and I am providing help to parents to bring up their children in a healthy environment. I am working in this profession from last 5 years, if you have any query regarding this please contact me. Archives
June 2021
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