Worried Your Kid Might Be Bad with Money? Here’s What to Do

Have you ever wondered how even very smart adults can end up with unhealthy spending habits? One reason is clear. Too many parents miss opportunities to teach their kids about money, creating offspring who have difficulties being responsible with their spending when they are older.

The solution isn’t to wait until you discover there is a problem – but to take charge and teach your kid smart financial lessons early on.

Demonstrate Smart Financial Behaviors and Values with Your Kids

It’s important to start conversations when children are small to set a healthy foundation that will benefit them as they grow. Even kids as young as three or four understand basic financial concepts such as:

• Exchanging a product for a dollar price
• Making choices while shopping
• Earning money through work to support the family
• Products and activities have their own financial value

Even very young children can understand basic concepts of money. And they are going to pick up by observing the adults around them, whether we like it or not. Teach youngsters – and try to be a model – about concepts like self control and delayed gratification that can eventually apply to their spending habits. Bringing them to your place of work can also be a positive influence, as it ties to the idea of working to make money and pay for the things you need at home.

Create Different Money Containers for Different Purposes

Some families use different containers to collect money that have different purposes attached. For example, separate jars for spending, saving and earning or sharing can be used to teach young kids about the different uses of money. Giving children small amounts of money and letting them decide where to put it gives them a visual reminder of how one container affects what’s in the other. If a child removes a dollar from the “spend” container, that’s one dollar less that can be shared or saved. It can also be used to teach about saving up for important expenses like school supplies or a college fund.

Have Children Do Chores at Home

You might be surprised at the positive financial impact of having kids do chores as they grow up. Sure, those chores can be attached to their allowances. But they don’t have to be in order to instill positive lessons about responsibility. Even smaller kids can do such tasks as:

• Make their bed
• Pick up their room
• Put clothes in the hamper
• Put away toys
• Put dishes in the sink or dishwasher
• Care for a pet

Such tasks are a predictor of a child having success later in life, such as getting a degree or a career. If you find it more helpful to give a small allowance after chores are completed, that’s great! A little trial and error will reveal whatever works best for you.

Talk to Children About Money Instead of GIving in to Their Every Demand

It may seem obvious to an adult, but simple conversations can create a deeper understanding of different uses of money, helping kids learn to make smart financial decisions. The steps above can also help teach them about delaying gratification, which is an important component of saving and managing one’s finances. If you give in to their every demand, it will make it more difficult for them to handle difficult financial decisions in their own life.

Be direct. Talk to your children about any unhealthy money habits they may be developing. Having control over spending and being able to save is something that even successful adults can struggle with, so it’s worth establishing the right habits with kids as soon as possible.

Show Them the Many Financial Services at CCEA Currency Exchanges

Next time you use a Community Currency Exchange (CCEA) financial program or auto-related service, bring your kids with you! They will get a view of the many money management tools available that help adults throughout the Midwest keep their finances on track.

Contact the CCEA or visit your nearest location to find out what we can do for you today.