How To Teach Your Kids Financial Responsibility
Financial literacy is a crucial life skill that everyone should be taught. And that includes kids. It’s never too early to start teaching your kids financial responsibility as it will help them in later life. Teaching kids about financial responsibility and the true cost of things will set them up with skills for smart money management.
Teaching your kids financial responsibility it’s a guarantee that they’ll grow up managing their money well. But it’s a great foundation to start with. Here are some ways you can help your kids.
Start early
Within reason it’s never too early to start teaching kids about money. Use everyday situations as opportunities to reinforce good money habits, for example saving up their pocket money to buy the thing they really want. Or you can involve them in food shopping and explain about comparing prices and budgeting your spend.
As they grow older you can involve them in more and introduce more complex topics. This is something I would have really benefitted from when I was a teenager knowing what was to come with credit cards, investing, pensions etc.
Teach your kids financial responsibility by leading by example
Children learn by observing the behaviour of people around them so it’s important to lead by example when it comes to managing your money responsibly. Discuss things openly with your children and be transparent about your financial decisions. How much you tell them will depend on their age but be honest.
Show them how you budget, and what you spend money on, and involve them in age-appropriate financial discussions. For example if you are planning a school holiday day out tell them how much money is available and explain their options.
Use pocket money and chores
Pocket money and chores can be valuable tools for teaching kids about responsibility and money management.
When it comes to chores it’s important for kids to learn that most household jobs are done for the household and not to earn money. So keeping their rooms tidy or clearing their plates after given may be a given. But it can be a great incentive to offer additional jobs if they want to earn some money such as cleaning the car or gardening.
Encourage them to save a portion of the money they get in order to buy the bigger things they want. Or just to have it ready for when they see something they like.
Teach your kids financial responsibility by setting savings goals
Teaching kids how to save will be a very important skill for them in later life. And it will help them understand the value of items. Encourage children to set savings goals such as saving for a new toy or a day trip.
This way by saving they’ll appreciate the value and not expect instant gratification. Teaching kids the value of delayed gratification is crucial for helping build financial responsibility. And saving up to buy things will remove impulse and help them gain a sense of accomplishment. This may mean helping them to aside some of their pocket money each week, or saving their birthday or Christmas money.
Use technology to help
Technology is a key part of kids lives and chances are they’ll learn better using it. There are apps such as GoHenry and Rooster Money specifically for kids to help them see their balance grow. You can put their pocket money in there or get family members to transfer birthday money into their account.
With some apps you can even get their own pre-paid debit card to use. As a parent you’ll get alerted when money is spent, and as it’s pre-paid there’s no chance of fees or overspending.
Teach your kids financial responsibility to help prepare them for the future
Financial education is an ongoing process, so helping them learn early can make a huge impact to their lives. I know if my parents talked more about money when I was growing up, or involved me that I would have learned things a lot earlier.
24 responses to “How To Teach Your Kids Financial Responsibility”
Leave a Reply
All About Me
Rhian Westbury
Travels and Destinations
Nothing currently planned
These are great tips. It’s never too early to start teaching kids about money. We started giving our kids allowances when they were quite young and showed them how to save.
This is such an important skill to teach them & it is never too early to start! My husband & I have been working on skills like this, cooking, etc to help them prepare for their futures.
That’s so good and something I wish I had more of as a kid. I had no idea what I was doing when I first moved out haha x
It is really important to teach children about the value of money and financial responsibility from an early ages. Mine get money for chores when they do them. They get to spend the money as they wish so can see how much effort it takes to earn the money they have and what they can buy for it.
That’s such a nice idea. I had way too much of an easy life as a kid and didn’t really get many chores so had no way of earning extra x
Amazing tips, thank you so much…I try to use technology to make it interesting for the kids and it is working just fine.
These are wonderful tips for teaching kids about money and finances. I have a 5 year old girl and I will be using your ideas. I like the chores and pocket money idea for starters.
We have set up Go Henry accounts for our children. They get a weekly allowance each and have to do chores. They can then see how long that money lasts eg. a quick spend in the sweet shop or saving for something they really want to.
I bet a quick spend in a sweet shop can easily use up way more money than you’d want haha x
Making sure your children know the value of money is so important. Thank you for these tips! Using technology is always a good idea.
I agree with teaching kids to be responsible. My daughter saved for her first tablet as it was not near brthday or Chrstmas. She did little jobs and saved her money. She also learnt about budgeting this is one of the most important lessons you can give them
That’s amazing that she managed to buy her first tablet by herself x
Thanks for sharing such helpful tips on teaching kids about financial responsibility. It’s such an important skill, and your article gave me some great ideas to start implementing with my own little ones.
This is such an important topic to teach the kids for sure. I wish someone had taught me when I was younger……as I ahd to leanr from my mistakes BUT at least I learned LOL. Great post and appreciate you sharing! Financial Literacy is everything!
Haha same, I had to learn from my mistakes too x
Great points made here. I think early education is so important especially with finances and instilling those core values. It sets them up for success!
Go Henry has been amazing for teaching my youngest to save his pocket money rather than spending it. He loves watching his savings grow each week.
Things are so expensive these days that it’s even more important to teach kids good savings habits than ever before 🙂
Lou x
You’re so right. When I was younger I probably wouldn’t have had to save that long to get things, but now things are so much more expensive x
I feel like kids learn a lot less about financial responsibility lately. It is good to have them work on these skills!
I think more kids should learn about financial responsibility. Its a good life skill to have.
I totally agree, school should teach more practical life skills/ knowledge x
These are some great and helpful points you covered. I agree Pocket money and chores is good for teaching kids about responsibility and money management.
I am so glad that you are writing about this topic and I’d love to see more and more people come forward to talk about it. Teaching kids financial literacy is definitely a crucial life skill and it surely sets them apart for significantly better money management in their future.
It’s a beautiful thing to begin financial responsibility training from childhood. Awesome, simple ways to do it. Bravo, Rhian!