Without a doubt children are one of the greatest gifts from God but no one will argue they require a great deal of time and energy. As parents we want our children to have a successful financial future, but how do you train your kids to be financially fit?
Be Intentional
Parenthood is not passive. It is active and intentional behaviour to create a loving and protective environment for our kids. Encourage communication around finances and even in general, it is important to create an open a free environment in which to have conversations.
Practical Tips:
-Have frequent family meetings. Family meetings don’t always have to be a result of emergency.
-Be there to listen. If you want your children to listen to you, you need to listen to them.
-Be transparent with your finances. They cannot model what they do not see.
Three little jars, sitting on a shelf.
Another great tool for training your kids to be financially fit is known as the three jar method. From a young age you can teach them to watch where there money goes and allow them to decide what to do with the money they earn.
How it works:
-Give your kids three jars or containers to hold money.
-Decorate the jars and label one give, one save and one spend.
-Set up percentages. Usually with young kids we start with the 80% being saved, 10% being give and 10% being spend but you can allow parental discretion to rule here.
-To your very best split the money into these percentages. For every $10.00 they put $8.00 in their save, $1.00 in their give and another dollar in their spend.
-Put the jars on the shelf and watch the money grow! You can also deposit the save money into an RESP or savings account. Kids love to know they are rich so don’t be shy about showing them where you deposit the money and watching it grow together!
Work is Okay
We seem to know this in our heads but when it comes to our kids it seems we forget. Getting a summer job will not kill them, no matter how much they complain; in fact it might just help prepare them for a successful future!
Practical Tips:
-Create a chore list and set expectations. Kids often don’t know what is expected due to lack of communication.
-Don’t feel like you have to pay them for every chore. They are part of a family unit and some jobs are part of their responsibility. Decide on the chores which need extra incentive and only pay for those chores.
-Encourage your children to step outside of their comforts zones. Sometimes making a phone call to an employer is terrifying so be sympathetic to their anxiety while pushing them to do more than they thought possible.
-Encourage entrepreneurs. If one or all of your kids have ideas for businesses of their own, encourage this! It is a valuable trait to inspire in your children and teaches them a great deal about how money works.
Training your kids about how money works does not have to be scary but it does require being intentional. Open communication and transparency in your own life and finances is a key influence in how your children view their finances. So what are you going to do about? Plan that weekly family meeting? Start helping your kids look for jobs? Create a chore list? Whatever you start to do, remember training kids now will set them on the road to financial freedom!
Here is a great article you may want to check out! http://www.forbes.com/sites/laurashin/2013/10/15/the-5-most-important-money-lessons-to-teach-your-kids/