Raising children can seem like an increasingly challenging responsibility, and it is one parents cannot afford to fail. One critical responsibility associated with parenting involves educating children about financial management. Specifically, promoting regular savings habits in children can help them to get their own lives off on the right foot. These are some steps that fathers specifically can take to teach better savings skills to children.
Make Saving a Family Affair
Saving money in an emergency savings account is essential for financial health, but savings also can be used for large expenses. For example, if you are planning a family trip to Florida, it makes sense to save cash rather than charge expenses to a credit card. Depending on the age of your children, you can sit down to discuss the cost of the trip and how everyone needs to pitch in in different ways. You could ask them to contribute a portion of their regular allowance or even to earn money with side jobs. You could also talk to them about making sacrifices regularly, so more money can be saved. For example, rather than seeing a movie this weekend, you can put the money that you would have spent in a large jar placed in a central location in the home. This jar is filled with your family’s vacation money.
Offer Savings Instructions for Allowances
Many parents offer allowances to children in exchange for completing chores regularly. Encourage or even require your children to save a portion of each allowance payment regularly. To show them the benefit of this, periodically show them their savings account balance. They may get excited to see this account balance grow to a sizable amount over time.
Teach About Debt and Budgeting
Along with saving, your children should know other helpful financial skills. The benefits of saving money can help when it comes to combating debt and building a monthly budget. Show the kids what your monthly budget looks like, which utilities and bills need to be paid, and how much is usually left for entertainment. Teach them about loans like the mortgage you might pay, and how interest rates work as you slowly pay off something big, like your house.
Utilize Technology Effectively
There are many apps available to help parents teach children about money management. For example, there are several apps that parents and kids can use that allow parents to digitally pay an allowance to kids. These apps may let the kids cash out on their allowance at any time, and some are even linked to very popular online retailers so that they can shop as desired with their allowance funds.
Remember that children learn financial responsibility from their parents. They often mimic spending and savings habits that they witnessed by watching their parents over the years. Understand that your financial management efforts can affect your children’s financial future, and always focus on making the smartest money decisions possible.