Tips for Teaching Money Skills to Your Kids | H&R Block
October 17, 2016 : Jeannette Kaplun – Guest Contributor
Editor’s Note: Now more than ever it’s important to practice teaching your kids about money, a life lesson that often is overlooked. Whether you are a parent to school-aged children or teens, read on to learn more about teaching money skills for life!
When our children become teens, they seem to need us less every single day. Their peers and teachers might have a tremendous influence and they become increasingly independent. However, as parents we have a crucial role, especially when it comes to teaching teens real-life skills.
An essential part of any teen’s education is learning how to manage money. Even if they are not working after school or during the summer, it’s our duty as parents to teach them the importance of saving money, how to create a budget, and how to discriminate between needs and wants. Also, once they do start working, it’s crucial to teach them about taxes and their own financial responsibilities.
Keep in mind that our kids learn more from our actions than our words, so it’s key to lead by example.
Here are five suggestions so you can teach financial skills to your teenager:
1 – Work on a budget together.
It doesn’t have to be a general household budget, but can be a simple as a monthly lunch budget, so he or she can see how everything adds up. By learning to create a budget, teens can learn to be financially fit later in life.
2 – Leave it to them.
Ask your teen for suggestions on how to save a bit more money each month. That way your child feels you value their opinion and are not simply trying to lecture all the time. It’s important to show teens that you trust their judgment.
3 – Teach the importance of saving.
Instill the importance of living under your means to increase your savings. Don’t buy things you cannot afford.
4 – Never assume.
Don’t assume teens understand common financial terms. Discuss what interest means, how it is calculated, how it adds up, and other related terms.
5 – Break the silence.
Many of us grew up feeling it was in poor taste to discuss money, which led to little or no knowledge about how to manage our finances when we were teens. Welcome any questions your kids might have, don’t belittle them even if they ask something you find obvious, and listen to their concerns.
Do you find it difficult to talk with your kids about money and don’t know where to start? It’s easier than you think. There are so many resources to guide you and your teen, including H&R Block’s Dollars & Sense, a program that started in 2009 to give young people the skills and confidence needed to manage their personal finances.
Educating your child on the basics of personal finance is a crucial step for them to succeed in life once they graduate from high school… and beyond. Teaching kids about money is a crucial step to having practical money skills for life.