Financial management is an essential topic for any child. Help your kids learn the ins and outs of managing their money while they’re still at home so they have strong money habits in place before they’re on their own. Make sure your children realize these important points early on so they don’t learn them the hard way when they’re facing real debt as an adult.

Eating Out Can Take a Big Bite Out of Your Budget


                       Image vis Flickr by SteFou!

The dollar menu at the fast food joint down the street looks like a great deal, but you can go bankrupt on burgers if you’re not careful. Buying food from the grocery store is expensive if you don’t know how to shop. Put your child in charge of your family’s grocery budget to show them how the cost of food really adds up.

Encourage your child to make a menu and shopping list before hitting the store. At the grocery store, teach your child how to shop smart. For example, end cap items aren’t always on sale. The highlighted price might be just what you’d usually pay, while a cheaper alternative is waiting down the aisle. Your young adult will stock their fridge in a whole new way after this lesson.

Interest Adds Up

Credit cards have great allure for the new college student who has a long list of wants and only a little cash to work with. During that wide-eyed freshman year, it’s easy to imagine lucrative jobs that will help pay debt with ease somewhere down the road. It’s important for your children to understand that purchases charged to a credit card cost more than what you see on the price tag.

Set up a loan system with your child that works the same way a credit card would. Your kids can buy items they want now, but they’ll have to pay you back with interest over time. Calculate the total cost of the interest over the period of the loan and show your child how much they really paid for the item using this system. This practice will clearly show how you can save money by waiting until you can really afford something. 

Not All Accounts are Created Equal

When your child leaves for college, he’ll be inundated with credit card offers. Teach them how to read them. Explain the interest rate and annual fees. Encourage your child to stay up-to-date on finance topics, so he’ll build a wealth of knowledge to refer to when it’s time to make financial decisions.

So when the time comes to start considering an early retirement, for instance, they’ll know the pros and cons of annuities. And they’ll be prepared to make the correct decision as opposed to potentially blowing their money on a risky investment.

The Roof Over Your Head Isn’t Cheap

If your family doesn’t often talk about money, now is the time to break your silence. Talk about how much your mortgage or rent costs. Look at utility bills with your child and challenge them to find ways to lower it. Start going to open houses on the weekend or touring local apartments so your child will learn what housing looks like at different price points.

This will help your child know a good deal when they see one if they’re looking for an apartment. Seeing what the housing market looks like may inspire them to start saving for that down payment now.

Earning Money is a Rewarding Experience

Your child’s first job shouldn’t come after college graduation. Encourage them to get a job in high school so they can learn the value of earning their own money. If their schedule won’t accommodate a job, give them work around the house that they can earn money for. It’s important to learn how rewarding a job is. If your child gets into the habit of working for their money now, it will serve them well all of their life.

Savings are Worth it in the Long Run

Help your child learn how savings will add up over time, so they’ll appreciate the value of putting money aside. Open a savings account for your child and explain the interest rate to them. If the interest is too small to appreciate right away, create a sample savings account of your own. Explain to your child that they can have their $5 allowance now or have $6 in a week if they leave the money with you. This can create a long-term habit of saving instead of spending.


If your kids learn these points now, they’ll have the building blocks in place for sound finances as an adult.

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