Three Tips for Teaching Your Children to be Financially Responsible

For parents, caregivers, teachers, and anyone who cares about the future of our society, it’s essential that children learn to be responsible, functional adults. One of the most important aspects of maturity and health is financial responsibility. Unfortunately, this subject is rarely taught in schools and most children graduate without ever learning about good financial habits and basic practices, much less important knowledge about investing and wealth management.

If you have young people in your life, one of the best things you can do for them is to instill in them a sense of financial responsibility and the knowledge necessary to master basic financial literacy. Fortunately, it’s easy to teach the young people in your life how to be responsible and smart about money with just a little bit of information, coaching, and encouragement.

First, make sure you help the young people in your life to find employment, which can be difficult in today’s tough job market. Earning their own money is the fastest way to teach them the value of a dollar. Help them find a part-time job doing something useful and fun like selling salsa from a company like Jose Madrid Salsa or working on a paper route.

Second, teach the young people in your life the power of investing and the best ways to go about it. It’s easiest if they are encouraged to save for both the long and the short term at the same time. This way they’ll experience tangible results right away, which will make it more likely that they’ll keep saving for the future. It’s important to also teach them the dangers of wasting money and how quickly their money can disappear. If your child makes a poor financial decision, let them bear the brunt of it. If you’ve also been long-term saving, don’t let them have access to that money until they’re older.

Finally, encourage your child to practice good financial habits and decision making by showing a good example with your own behavior. Don’t use credit to buy things you can’t afford. Instead, talk about how you’re saving up for a while to use cash for your purchases. Your child will see the results of smart saving and the value of looking ahead to the future.

Financial responsibility is a crucial lesson. Teach it to the young people in your life.

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