Building Success has no Age Limit
What if you knew what you know now, as a teenager? This seems to be a hypothetical question many ask themselves.
Today, there are more resources than ever before that can help teach your children great money habits. With that, some articles and resources can lead the youth in the wrong direction and give them unrealistic expectations. In this article, I am going to provide insight and recommendations that will help your children understand the key concepts of the value of money and how to build a platform that will hopefully lead to future assets and success.
Growing up, all we had access to were plastic toy banks and fake dollars to play with. With kids having access to the internet and many resources, there are virtual banks that kids and children can open such as Bankaroo. Kids can learn how to save and budget by using an app/website. These virtual banks will give children access to hypothetical money and accounts that can be incentivized by parents to give their children spending goals and budgeting to reward their children. These apps look just like real bank accounts and can be customized based on the practices you would like to learn.
Some other recommended apps are Greenlight and GoHenry. These apps allow you to give your child a weekly allowance and you can control the limits. Your children will learn the basics of managing money and how to operate a debit card.
The most common and probably most effective habit is to set an example. For kids, you can simply play games that involve money or create a savings jar for tasks and reward them. For teens, you can open a checking and savings account that will teach them how to properly manage their money.
Right now, there are saving accounts that are offering very competitive yields. When your children see their money compound over some time, they will want to continue their saving efforts!
If you have a child graduating high school or going to college, establishing credit is essential for them at a young age. Simply allowing them to buy a tank of gas per month and paying off the balance can be pivotal for building their credit score and improving their chances of getting approved for future loans. You can then pivot and explain the importance of paying off the credit card and the danger of accruing debt. Setting good examples and ensuring your children have a general understanding of the value of money is important and can be done by showing opportunity costs. You can demonstrate this by saying to your child, “If you buy this shirt now then you won't have the money to buy these pants as well”. When doing this you are showing that money has value and there are trade-offs for everything. They will want to begin saving/investing their money to afford these items.
These principles can prove to be beneficial for your children now and later down the road, your kids will be able to instill these habits in their children and generations to come. Once these concepts are understood, you can even open a simple investment account and invest money in the market when they turn 18.