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How to Teach Your Kids Financial Success

Teaching your kids about financial success is a great way to start them on the right foot. Below are some tips to try that will teach your child about money and set themselves up for success.

Earn Money While Helping Out

Instead of giving weekly allowances, try giving an allowance in a “job-based” way. It’s a great way to have conversations and teach your kids how to earn money by helping out. The more they help out, the more allowance they will receive! 

If you have any chores around the house that need to be done, pass them to your kids and watch their determination soar!

Saving Using the Money Jar Method

Another tip is to use their money-saving hack called “The Money Jar Method”. This method shows children the concept of saving, being accountable, and learning how to spend vs. save. 

Let’s use $20 as an example to see how this breakdown works:

Take four different jars and label one for charity, one for college, one for long-term savings, and one for spending. The breakdown of the jar is below:

  • 10% goes to charity or towards something that will help others ($2)
  • 20% goes to their college fund ($4), 20% to long term savings (such as a bike, etc) ($4)
  • The remaining 50% of the money goes into their spending jar (so $10) for things like food, movies, etc.

This is a simple hack that teaches kids aspects of budgeting and setting up long-term financial success. 

Give it a shot, and let us know what you think! You can also find a video of this breakdown here.

Let Them Fail Early With Finances

One of the greatest steps to being financially successful is to learn from our failures. We never want our children to fail with money, but we want them to think critically about spending. One way you can do this to your children is to let them “fail” with money at a young age. If they’ve earned $10 and want to spend it all on bubblegum, let them do so! Allow them to come to the conclusion that the money they earned won’t come back to them in the future. Rich and Gaye share their heartfelt story with us regarding this lesson in our interview, where Rich notes: “[it’s nice for your children to] learn that lesson at eight years old, rather than at 18 years old or 28 or 38 or 48”. 

Introduce them to Debit / Credit Cards 

Another thing you can do is introduce the concept of credit. This might feel complex, but it will really help with understanding how interest works, bank statements, and depositing money. Lending them a hand and helping them understand aspects such as credit ratings will set them up for success. 

Rich and Gaye explain how helpful this method was with their kids, as it set up their kids with a bright future when it came to making bigger purchases like their first home. 

Get Your Children Involved in Your Business

Another way to teach your kids about earning money is to get them involved and teach them the “ins and outs” of the business world. It’s good for kids to know what their parents do and give them experience as an “intern”. It will teach them about being accountable, figuring out what they like, and give you a helping hand!

For example, if you run a dental practice and you pay someone to clean the office, why not hire your own child instead? Or if you need help with social media, content creation, or managing the books — get your kids involved! 

Seek out ways to make it fun and find opportunities to teach them small lessons along the way. 

Show a Family Economy

Lastly, a way to instill these financial tips into your kids’ daily lives is by implementing a family economy in your home. A family economy is a way to describe a family running as an economic unit, taking the money you spend on your children and re-routing it through their ownership and choices.

The thesis behind the idea of a family economy is that if kids are given a legitimate and fair way to earn money, they will develop initiative and motivation because they perceive ownership.  

The key component that Rich raises to teach your kids is to get them to ask “How Can I Contribute?”. If they ask that question, then they will always be looking to fulfill a need, where values and compensation will follow.

Raising a financially savvy child is not easy, but it can be done. You may have already tried some of these strategies with your kids and had varying degrees of success, or you might need to try something new in order to get them on the right path early. 

If you’re looking for more ways to teach your children about money and to be confident in your family wealth, we want to help! Follow our blog for more tips on teaching your kids financial success!

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