Don’t Set Your Kids Up For Future Bankruptcy
We lead by example with our kids and if you’re living hand to mouth you are increasing the chances your kids will too. Teaching your kids about budgeting is a great strategy to not only give them valuable life skills but to keep yourself on track as well.
If our kids see us spending every spare dime we get and buying things on credit while living frivolously beyond our means, there’s a good chance that the minute they’re eligible, they’ll be signing up for credit cards as well. You don’t have to let your children repeat your financial mistakes.
If you’re in the midst of (or just starting the) mending your own spendy ways, you can teach your kids financial wisdom at the same time.
Teach Your Kids About Budgeting
-It’s a great idea to tell your kids about the family budget. You don’t have to reveal private details but there’s nothing wrong with telling them that something can’t be purchased because it is not in the family budget right now.
-It’s also a good idea to have your child set up a budget themselves within their own allowance. Teach them to save money, to tithe to charitable causes and to plan for the future. For instance, have them allocate a specified amount of their earnings to savings and teach them to give to charity either at church or at school.
-Don’t give your child unlimited access to their own bank account until they’ve demonstrated that they know how to manage money. Set a limit or require your signature as well for withdrawals
-Don’t give your child a credit card without strict rules and guidelines. If you’ve provided them with a card for emergencies only and they stray from that policy have a consequence
-Set up a bonus and tax structure for your child’s allowance. If they don’t do what they’re supposed to in order to earn that money, deduct from it. If they go above and beyond the call of duty with school marks or chores completed add a bonus. This teaches them how the real world works with rewards.
Don’t make money the absolute priority in life. You don’t need an Alex P Keaton ( a child too focused on money) but taking the time to teach your children about fiscal responsibility is something they’ll carry into their adult years which will make them self-sufficient and increase their chances of financial success.
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