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Years ago, as a teen working two jobs, I thought I had good financial skills. Now as an adult, I realized that all I had was a lot of money coming in and little needing to go out, so I was able to handle it fine. With bills and responsibilities, good money sense is crucial. Not wanting my kids to end up struggling as adults, I’m trying to instill good financial habits in them when they’re young. Kids and money talk can sometimes be difficult, but it’s super important to start early!
Like I said, the last couple of years in high school I was working two jobs, so had plenty of money coming in – and other than saving for a very affordable used/fixed up old car, not much in the way of expenses. This gave me a false sense of confidence, so once I hit college – and especially married life – reality hit and soon we were deep in debt. I don’t want my kids to deal with that – being an adult making a good income, just to still be skrimping by because of debt payments from past financial mistakes. Kids and money isn’t talked about very often, but I’m hoping more parents realize the need to teach our kids to budget, avoid debt, and make wise decisions with their income.
See our post from a few years ago on kids and money
One challenge I’ve found, is that since we’re so tight on money, the kids notice this ‘focus’ on money and ‘oh, we can’t afford that’. They don’t realize that it’s come from bad choices in the past, purchasing way more wants we should have skipped out on, or waited for. I’ve been trying to change up the conversation with them, explaining that we wouldn’t be in this situation if we had made better choices.
Teaching kids to differentiate between wants and needs is a huge step in building good financial skills. If they can learn delayed gratification, or being able to do without things you don’t really need (so you have more for what you DO need), as kids, that’s all the more ready they’ll be when the BIG decisions come into play.
Another thing I want to teach them, other than how debt can build up quickly, and really hurt you in the long run, is the importance of saving. Having a car suddenly break down, a broken arm requiring a hospital visit, or losing a job may affect your budget in a big way – so by learning to always have a savings for emergencies or the unpredictable, they can be prepared. Being able to save up for big purchases, such as a car, vacation or home, can make a big difference between avoiding debt, as well.
It’s also important to let them know that it’s okay to have fun – just to keep it in check. Good money skills doesn’t mean never spending it on wants, it just means making wise choices. We love making goals to save up for wants – even if it’s just saving up to go to a matinee movie, or LONG term goals of saving up (and looking for the best deals and savings options) for a family vacation. Our kids have learned that we make trades – we eat out less, or go out to activities less, than other families. By doing that, we’re able to save up for bigger things we all want, that in the long run we’d like better anyway. Being able to enjoy yourself is a part of life, it’s just important to not let it be a big negative afterwards.
Lastly, we should be showing them (by example) the blessings of giving. Whether it’s tithing to church, donating to local charities, or helping provide items for the homeless – help them gain that love of caring and giving to others while they’re young, so hopefully when they’re grown it remains.
Kids and Money Overview
- Teach delayed gratification for wants
- Know the difference between needs and wants
- Show the value of time and money – give opportunities to work for money
- Debt can build up fast, and can hurt you for a long while – affecting your future budget/income
- Plan and save for big purchases
- Always have a cushion for unexpected/emergency costs
- Make trades – spend less on eating out so you can spend more on vacations
- Don’t forget to give – share the blessings
- Have fun, make goals – just be wise about your choices
What are your best tips for kids and money?
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