Spending habits are very easy to develop, but can be very difficult to change! We sat down with an expert, accountant Katie Zamora, to talk about why it’s important to teach your children to be financially responsible, and the best ways to teach your little ones about money.
The way that a person views spending and saving money is usually shaped at a very young age. That is why it is very important to teach children how to spend and save wisely. Parents can start out by teaching their young children the basic economic principle of wants and needs. It is important to express to them that everyone has to have to have food, shelter, and clothing to live. But we do not have to have that Barbie doll in the toy aisle, or the pack of bubble gum in the checkout line to survive.
As children grow older, parents can have their children earn money by doing chores around the house so that they have the opportunity to buy things that they want. They can learn the importance of doing a job well, and getting a reward in return. Doing chores will also help to teach them the value of hard work, and show them that if they do not work, they will not get paid. Here are some ideas for chores around the house:
- Put toys away
- Make the bed
- Put away groceries
- Help to set the table
- Fold laundry
- Clean room
- Bring in mail
- Take out the trash
As children get older, parents should teach them what financial guru Dave Ramsey calls “Patience in Purchasing.” This concept stresses the importance of not buying something on a whim. Explain to your child that once they spend their money on something, it is gone. They will have to earn more money if they want to purchase anything else. This will teach them to think before they purchase, and make sure that it is something they really want. It is also beneficial to teach kids to think about a purchase overnight if they cannot decide if they want to buy the item or not. This will curb impulse buying as well.
Parents also need to teach their children to save money. For example, if your child makes $5 from doing chores around the house, teach them to save .50 cents of it. They will then be able to see their 10% savings grow into an even larger sum over time. This will create a positive habit that will continue into adulthood, and influence them to keep saving at least 10% of their salary.
Giving money is just as important as saving money. Parents can teach their children to be generous, as well as financially savvy. Encouraging children to give some of their hard-earned money to one’s church or charity of their choice is a great way to teach them a lesson about generosity and selflessness.
These tips are a great way to teach your child how to be financially savvy. They are also a great reminder to adults as well!
About the Author:
Katie Zamora is the Controller of Accounting at Heritage Land Bank in Tyler, Texas. She has a Bachelor’s degree in Agricultural Economics from Texas A&M University. Katie and her husband have one puppy named Tucker, and she enjoys spending time with her family, running, and cooking.
Urgent Care for Kids is the largest pediatric urgent care chain in Texas, serving families in the greater Austin, DFW, and Houston areas. Our goal is to provide every patient with the highest quality medical care and superior customer service at a time and location that is convenient to working parents. We accept all major commercial insurance plans and all Texas Medicaid and CHIP plans in order to best serve our patients and their families. To learn more about our locations, hours, and services we provide, please visit our website.