Saving money is one habit that takes a while to build, and even adults have a hard time mastering it. In America, 63% of adults live paycheck to paycheck with no savings set for emergency expenses. However, every parent feels that their child should learn from their mistakes and lead a safe and secure life. But for that, you need to lay a foundation for them to build upon and do well in life.
Having good money habits from a young age can help your child to make the right financial decision. They can help your child with overspending and under saving. Here are 5 money habits you should teach your child right now.
1. Control Impulses
This is a hard lesson to learn for everyone and especially teenagers. Parents should help them in opting for things which they truly require. They can devalue the money given to them if extra expenses are happening.
Every parent should raise their child who understands that “Money doesn’t grow on trees”. From an early age, kids should require to differentiate between what they truly need and what they want. They have to wait and save money for things they want. Make them realize that going into a store doesn’t necessarily mean buying something every time.
2. Create Budgets
Creating and sticking to a budget is certainly important. However, this is easy to teach from an early age. You can involve your kid in creating monthly budgets for your household. Discuss spending, saving, and planning with your child. Train them to budget for even the smallest of things.
Offering regular pocket money can help them budget. But do not cave in, if they spend their pocket money way too early.
3. Generate Opportunities to Earn Money
kids require their own money to learn how to manage and spend it. You can pay your child allowance for doing chores around the house. While teenagers can do part-time jobs like babysitting, or dog walking. It will teach the value of earning their money.
4. Save for the Future
Investing for a safe and secure future is a common financial foundation but can be hard to implement. Kids easily become attracted to the latest things in the market and end up overspending.
You can open a savings account for your child, to which they can contribute weekly. Show them the bank statement at the end of each month, this trick will motivate them to save more from their pocket money.
5. Invest with a Plan
Teaching investing to your child can help them to build their wealth faster. Involve them if you are making an investment, and grab this opportunity to teach them about various ways they can leverage their money.
It is worth teaching them about the stock market and various investment plans. They will easily listen when they realize they can make their money grow.