Your kids can grow up and become super money spenders and savers. You must create the right foundation. You are a responsible parent when you apply important money lessons to teach your kid. Otherwise, you might be as well set them to fail. It will take time for your kid to understand personal finance and money management. The best approach should be systematic. You need to gradually introduce the lessons from childhood and repeat them until teenage years. The child will understand the importance of money and then learn the good money habits. Here are the lessons.
You need to let your kid handle small financial decisions so that they build their ability to make decisions. The kid should know a few of the consequences of making a bad decision. The financial responsibilities will grow annually. You can start by sending the child to a local mom-and-pop shop for them to get some groceries. They need to know how to pay and get their change. You can also give them money in the morning and ask for a report on their expenditure. You can encourage them to come back with the change after you finish shopping.
Banking is the management of money in an account. You can provide piggy banks as a start. You can also give them money to use and save. At the end of the week or month, the kid should tell you where the money went and what is available in the bank. They can use savings in the bank to plan for future expenditures such as buying an item. Instead of buying Christmas gifts for your child, you can give them some money to save from October to December and then take it out and go with them shopping for a particular gift. They will understand the essence of waiting before spending. They will use the lessons on delayed gratification to enjoy life.
Give your children jobs so that they can earn their weekly or monthly allowances. Most people give their children allowances and wonder why they grow up with no idea of how to spend money well. The main reason is that you are spoon feeding the child. Meanwhile, you just need to teach them to earn money. When they know they are earning money, they will also think critically about spending it. They will not develop a feeling of entitlement. They will learn good habits about increasing their income. You should not be surprised when they go looking for a job and become financially responsible from a very young age. On the other hand, the kids who get allowances might be seeking those allowances when they are 40 years old.
Debt money can make or break homes. Learning early about the merits of debt may save your kids years of interest payments. If you are struggling with debt, then you should use that as your motivation to teach the kid more about the reason why people end up in debt, and ways of staying out, in case they find themselves deep in debt.