How to Teach your Kids to Save Money, When Stink at it Yourself!

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Do you ever feel like you are the blind leading the blind when it comes to teaching your kids about money? You know that you really should teach them to better handle their money, but your don’t really manage yours all that well, and you don’t feel smart enough to teach them to do it?

It can be pretty hard to teach someone something without showing them how to do it also.

In this article, I’ll talk about some simple steps that you can take to show your kids some smart money habits that will stick with them for life!

Don’t worry, you don’t have to be an expert! You just have to be willing!

First, I highly recommend that you read a previous post called: How to Start a Budget That Your Family can Actually Stick to and  download the FREE Family Budget Planner Below…

Send me the Family Budget Journal!

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So go ahead and open this article up in the next tab over, and sign up to get the Family Budget Journal before reading anything else.

Did you do all the things? Good, come back here when you’re done….

OK awesome! I hope that you have a better understanding of the basics of creating a budget and in general why creating a budget is vitally important to your financial and mental health.

And like I said, you only need a basic understanding of these concepts, and a desire to learn in order to start changing the way your kids think about money!

So let’s get started!

I don’t know about you, but growing up, I was taught some about money management; my parents were not experts by any means. However that little amount that they taught me literally made a HUGE impact on my life.

They taught me that:

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~You work hard for what you earn

~You don’t buy what you can’t afford

~You can still have fun on a smaller budget

They didn’t know much about investing or playing the stock market, and they didn’t make a lot of money, but I did not suffer. I was always clothed, had a roof over my head, had enough food to eat, and remember plenty of fun, and probably cheap outings with my mom especially!

This story illustrates my main encouraging point of this article, which is that:

You do not have to make a lot of money in order to have some fun within your budget!

So let’s talk about the ways you can teach your kids good money habits!

1. Teach them to work

This is essential to helping your kids to start good money management skills. If they don’t have money, then they can’t manage it!

No matter how small they are, they can learn to do chores around the house that they get paid for. See my FREE Printable on Kids Chore Ideas by Age! 

When you teach them to work, you are laying a simple but very important foundation that says, “you have to work in order to earn things.”

You teach them by:

You guessed it… going to work everyday! They will see the hard work that you put in, day in and day out, and will connect this will the reality of how to earn money over time.

2. Always pay them in cash!

When ever they do jobs, pay them in cash whenever you can!

Having cash gives them not only something to actually hold, but a sense of ownership and responsibility about their money. On the other hand, telling them that you owe them $2 and that you’ll buy something the next time they want something is not as good- there is nothing concrete for them to see or hold, and you are essentially in control of that money, not them.

You teach them by:

Carrying cash yourself! Check out: How to Completely Change Your Life by Following Just One Simple Money Management Strategy!

If you are a beginner, this is an essential first step in understanding your relationship with the money that you earn. Please read the above article.

3. Teach them to save what they earn first, and spend second

Teach them that saving money is the first priority, and spending money is ALWAYS second. If they learn this now, they will have a much easier time prioritizing this concept later on in life, which can literally make or break them financially. This is super important.

As a general rule of thumb, encourage them to save at least 10% of everything that they earn to keep in savings- not to be touched. Everything else that is left over, they can prioritize how they want to.

You teach them by:

Discussing with them how you are putting a certain amount of money into your savings account every time you do it. Talk to them about why you are choosing to put away at least 10% into savings that you don’t spend. Talk to them about WHY that is important.

As a quick note, this concept of saving at least 10% is a great one to implement, and is to be used for emergencies and other non avoidable financial issues- like the loss of a job, not for buying things. Dave Ramsey recommends having a $1000 emergency fund at all times while paying off debt. Honestly, to me that seems like not that much and we keep more than that on hand- so you figure out what is a good amount for you!

Better yet, have the cash in hand, and take them to the bank and let them watch you deposit the money into savings. I know this seems like an extra step, but it will really help them to see that actually money gets put into the bank, not just numbers on some electronic screen!

4. Teach them to wait before buying something!

This teaches them patience, and shows them that better decisions are usually made when you have time to think about them first. This concept will guard against them falling victim to impulse buying later in life. This is a hard concept for a kid to learn because of the  “right now” world that we live in, but I promise, this concept is worth working on!

You teach them by:

Talk to them about things that you would like to buy, but are thinking about first. When I say this, I don’t mean think about it for 5 minutes while you’re at the store. I mean, think about the item at home for a few days. If you really want to spend money on it after a few days,  and if you can really afford it, then it may be something you’re willing to go back to the store for. In the majority of cases, you’ll decide against it though, and you’ll be happy that you didn’t spend the money on that impulse purchase.

5. Teach them to journal

Journaling can be really helpful in many different areas of life- and especially when it comes to managing money!

The first major reason is that it will help them to keep track of what their money is doing (how much have they earned? How much do they want to save, vs how much do they want to spend? Where did their money get spent, etc).

You may want to download my Free Printable Resource My Money: money savings chart for kids to help them get started!

The second major reason to encourage them to keep a money journal is to help them keep track of their goals for their money!

  • Are they saving for a toy?
  • If they’re older, are they saving for a car, or college?

It’s really important to keep encouraging them to write down their goals because this helps them to remember why they are working to save money, and makes it more likely that they’ll reach their goals!

You teach them by:

Keeping a budgeting Journal yourself! Seriously, did you sign up for it yet?

Take time every week to go over it, and reassess your own financial goals. Let them see how much money you have, and what you need to have for bills, and what is left over. Let them see you writing down what you’d like to do with part of what is left over after bills.

5. Teach them to have fun with their budget!

Money management, AKA budgeting truly does ensure that your kids will be able to buy the things that they want with the right thought and planning!

Budgeting really can be fun, and it gives your kids a wonderful sense of control once they start to do it! Not only this, but because they are no longer making impulse buys (which as I said before, if given the time to think about it, they probably wouldn’t have chosen to buy anyway), they will be able to save for something that they really want, and this is a great feeling!

You teach them by:

Dream with them about what you both can do after you’ve saved some money. You can plan a vacation, or a large fun purchase like a trampoline! Be creative and get excited about this! Your kids will naturally see this and want to do the same!

Teaching your kids to manage their money now, can seriously set them up for a lifetime of good financial decisions! Even small decisions, when made consistently, make a huge impact on the way your child thinks about his money.

Try out the steps above and let me know how they work for you! I’d love to hear your thoughts on what works to teach YOUR kids about money as well!

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