Every once in a while there is just something on the news that stuns me. It doesn’t happen often but it does happen. This is one of those stories. Desmond Hatchett of Knoxville, Tennessee is...
6 Tips to Raising Kids who Value Money
6 Tips to Raising Kids who Value Money
Did you know that 71% of parents have at least some reluctance to discuss financial matters with their kids? I know that my husband and I used to have a hard time talking to our children about money. It just wasn’t a subject that we were comfortable discussing.
That all changed when I read an article a few years ago about raising children who understand the value of a dollar. I knew right then and there that money was definitely something we needed to be able to talk to our kids about.
With summer vacation already here (we get out in May in Georgia), it is the perfect time to reinforce smart spending habits with my kids and to teach them how to earn money. We have been doing this for years because we are trying to instill lifelong spending and saving lessons. In short, we are raising kids who value money.
Is it difficult to talk to kids about money?
Nearly as many parents are uncomfortable discussing family finances (58%) as they are discussing death (59%). Isn’t this a crazy number?
Here are a few tips to help navigate the world of finances through the eyes of your children especially when it comes to travel.
1. Manage the “I want it now” Syndrome
This is a tough one as a parent. Managing the “I Want It Now!” syndrome has got to be something that every parent goes through. Did you know that 40% of all purchases are impulse buys? Probably a little more so in our household so we really try to think about everything that we spend.
On vacation, that means getting souvenirs at other places besides the theme park. For instance, you would spend $16-$20 on one of those fans that spray water available at every theme park. Or you can head to your local dollar store and pick up several for that price.
2. Don’t go into debt
Did you know that 46% of parents have gone into debt for something their kids wanted? We have a rule in our house that we do not go into debt for vacations or everyday spending. In fact, we try to stay out of debt completely except for large purchases that we agree on together.
57 % of kids agree with the statement “I expect my parents to buy me what I want” so managing our kids expectations is large part of what we do when we discuss money.
3. Teach your kids how to save
All of our children have savings accounts. We started them years ago and they deposit money in there on a regular basis. They love getting their statements in the mail so that they can check their balances.
4. Set the example
We strive to set an example of sensible spending and long-term saving. We actually share all of our financial information with our kids so they know exactly what it takes to run our household.
89% of kids said that their parents set a good example when it came to how to save and spend money. By setting a good example, we have found that our kids enjoy saving their money and that they set goals for themselves.
5. Use allowance as a teaching tool
All three kids get a weekly allowance provided they have completed all of their chores. They can spend 1/3, save 1/3 and donate 1/3 of what they get every week. Each child gets an amount equivalent to their age (so $13 per week for our 13-year-old).
By teaching our kids to save, spend and donate, we have found that they are making smarter choices. Those little toys that used to clutter my house? That no longer happens. YAY!
6. Talk to your kids often about money
We talk to our children constantly about money. They know exactly how many hours I have to work to pay for a vacation or a sport that they want to play. They know that when they ask for money, they need to have a plan on how it will be spent and paid back if it is a loan.
Get more information
Talking to your children about money does not have to be a daunting task. Use our tips above and visit the Money Confident Kids site sponsored by T. Rowe Price.
This is a sponsored conversation written by me on behalf of T. Rowe Price. The opinions and text are all mine.