7 Essential Money Principles to Teach Your Kids
Do you want to teach your kids about money starting at a young age? These 7 essential money principles are a great place to start as you raise financially responsible kids!
The following is a guest post by Elena of Kid Laboratories:
As parents, we’re often confronted with moments that challenge our values and principles, especially when it comes to money.
I recently found myself in one of those moments, standing in a checkout line with two toddlers and a six year old, facing the relentless pleas for treats. In that instance, I caved, opting for a quick fix to pacify my child’s demands.
Before parenthood, I had a career in technology and a background in economics. I understood the significance of teaching children about the value of money, distinguishing between needs and wants, and fostering financial responsibility. However, in the chaos of everyday parenting, those principles can sometimes take a backseat to immediate needs and convenience.
7 Essential Money Principles to Teach Your Kids
Reflecting on that experience, I realized the importance of instilling sound money principles in my children.
The truth is, parenting is a journey of constant learning and adaptation. It’s about finding the balance between meeting our children’s needs and guiding them toward responsible decision-making.
So, what are the essential money principles that all parents should know and strive to instill in their children?
1. Delayed Gratification.
Teaching children to wait for things they want can be challenging but essential. By delaying gratification, we instill patience and discipline, which are crucial qualities for financial success later in life.
2. Needs vs. Wants.
Helping children differentiate between needs and wants is fundamental to financial literacy. Teaching them to prioritize essentials over unnecessary luxuries cultivates mindful spending habits.
3. Budgeting.
Introducing children to the concept of budgeting at an early age lays the foundation for financial responsibility. Encourage them to allocate their allowance or earnings wisely, emphasizing the importance of saving and planning for future expenses.
4. The Value of Hard Work.
Instilling a strong work ethic in children teaches them the value of earning money through effort and perseverance. Whether it’s completing chores for an allowance or pursuing part-time jobs as they grow older, understanding the correlation between work and income is invaluable.
5. Financial Goals.
Encourage children to set financial goals, whether it’s saving for a toy, a college education, or their first car. By setting objectives and working towards them, children learn the significance of planning and prioritizing their spending.
6. Open Communication.
Foster an environment of open communication about money within the family. Encourage children to ask questions, express concerns, and participate in discussions about budgeting, saving, and investing.
7. Responsible Financial Behavior.
Perhaps the most influential way to teach children about money is by demonstrating responsible financial behavior ourselves. Children learn by observing, so modeling healthy spending, saving, and investing habits sets a powerful example.
Parenting is filled with countless opportunities to impart valuable life lessons, including those related to money. While we may falter at times, it’s essential to approach these moments with reflection and a commitment to growth.
By embracing these essential money principles, we empower our children to navigate the complexities of personal finance with confidence and resilience. After all, preparing them for a secure financial future is one of the greatest gifts we can give as parents!
Elena Czarnowski is a digital educator, specializing in non-traditional learning topics. Her most popular courses include “Moneywise: Financial Literacy for young teens” and “Goals & Grace: Character Development and Goal Setting.” Explore an entire suite of offerings at Kid Laboratories.