Money Habits to Teach Your Children
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” – Robert Kivosaki
Financial literacy leads to financial independence – the freedom to work when, where, and how you want. Teaching your children basic financial principles and instilling a positive relationship with money from an early age is one of the best gifts you can give them.
Here are five simple habits you can begin teaching your children that they will thank you for later!
- Start with goal setting and instilling delayed gratification.
With younger kids, working towards a short-term goal such as a new toy is a great way to start! As they grow (and their desires become more expensive) you can expand to include short-, mid-, and long-term goals. They’ll learn how they can enjoy the present yet still prepare for the future and feel the satisfaction that comes from achieving their goals!
- Teach them a simple tracking system – a.k.a. a Spending Plan.
As we all know, it’s not about how much you make but about how much you keep. By being aware of our earnings and expenses we can see where our priorities lie and have data to show us what we’re doing well and what we can work on. Teaching your child to follow a spending plan early on can make “budgeting” feel much less like a chore and more like a means to freedom!
- Help them automate their savings!
Give them opportunities to earn income whether it’s from a paper route or as they’re older, from a more formal employment, and have them set regular, automated savings. Learning to pay themself first from a young age and to spend what’s left will benefit them in every stage of their life. Live within your means and express the importance of having an emergency fund!
- Teach a positive money mindset.
Have regular money dates, we suggest monthly or quarterly, to discuss their progress – what have they done well and what can be improved. Encourage them to be comfortable discussing all aspects of finance and that they deserve to achieve the financial life they want, independent of their friends or even your own financial desires.
- Practice what you preach!
Exhibiting the same positive money habits that you’re teaching your children will be the most powerful way to show them their importance and encourage them to practice them for the rest of their lives. You can hold each other accountable through your unique journeys to financial independence!