It doesn’t take long for your little ones to realize that the green paper in your wallet has a special ability to get them things. Before long, they start wondering what it is and how it works. If you want to help your kid out in a big way, teaching them the basics of how to manage money at an early age is critical. Here are a few tips to try out when you want to help your child in this area.
1. Let Them Earn It
From an early age, you should associate money with doing something to earn it. Let your children do odd jobs around the house to earn $.50 or $1. Once they get older, you could let them mow the neighbours’ yard or do other miscellaneous jobs. You don’t have to just let them trade work for money either. For example, you might want to let them set up a lemonade stand or sell something else. Help them foster the spirit of being an entrepreneur as much as possible.
2. Encourage Them to Give Back
One of the most important lessons that most people learn is to give some of their money back to charity. Whether that’s giving money to a local church or giving it to a special cause, it can make a big difference for those who need it. Show your child how to take a percentage of each paycheck and give it to a charity. This will not only help them make a difference now, but it will also give them some nice tax breaks in the future.
3. Open a Savings Account
It is a good idea to open a savings account for your child at an early age. You can let your child deposit any money that he earns. By doing this, you’ll teach him the benefits of saving as well as the power of earning interest. Try to find him a savings account that pays a high rate of interest so that he can see just how well it can work. Many banks have accounts for children that pay a higher rate of return until the account balance gets up above a certain point.
4. The Importance of Goal Setting
One of the most valuable lessons that you can teach your child in regards to money is that goal setting is important. When your child wants to make a big purchase, she needs to understand that it probably isn’t going to happen overnight. Most people have to save up money for the things that they want to buy. Show your child how to set a goal, write it down, and then work toward it. If she wants to buy a particular item, you could also help her find it cheaper than normal. For instance, you could go out and find Oriental Trading coupons for her. Show her how to get coupon codes for Oriental Trading online. Then she can buy the thing that she wanted online faster than she would be able to otherwise.
5. Teach Them About Taxes
Once they get a little bit older, you should also teach your children the basics of taxes. When they get their first jobs, they’ll immediately notice that part of their paycheck is withheld for various taxes. Show them how big of an impact taxes can have and do some projections for what will happen as their income increases. Taking the time to teach kids about tax deductions and show them some of the most popular ones available could be a valuable lesson that will help them minimize their tax burden over the years.
Sometimes it’s hard to pause life long enough to teach money lessons to your kids. But if you’ll invest a little bit of your time now, it will make a huge difference for your kids later on.