10 Important Financial Habits You Should Teach Your Kids Right Now
Children naturally have no impulse control, thus teaching them all about managing their impulses at a young age will provide them with a stable head on their shoulders so they can make proper decisions.
Teaching your kids about money management is important. It is as important as teaching them to brush their teeth or eat a proper meal. These life skills are all children have when they leave the nest and go out into the big bad world.
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Why Is It So Important To Take Control Of Your Money?
Financial responsibility should seriously have been a class in high school. But really, it should start at home at ripe ages of 5 or so.
After graduation, most of us immediately go get college debt and some sort of a credit card.
Being irresponsible with money at those ages causes financial stress that follows us for a really long time, and can stop your children from buying their first car or home. That kind of stress can actually be avoided if the proper lessons are taught in school.
But alas, many are struggling to get out of debt and are having trouble saving money these days.
Saving money is not that easy. It takes self-control and some sacrifices to hit your goals.
Financial Habits You Should Teach Your Kids Today
1. Always Know Where Your Money Is
One of the most important things you can teach children is the importance of knowing where your money is. It is really easy to lose track of your expenses when you’re a young adult and you’re signing up for subscriptions left, right and center. Putting a system in place with your kids before they move out of the house will keep them out of financial trouble later.
I didn’t have this growing up, and I learned many financial lessons the hard way.
I am currently teaching my children the value of money, starting at age 5.
2. Create A Budgeting System
Help your child create a budgeting system they can stick to.
We use the envelope system in our home, but we adjusted it so it works with our digital payment systems with our banking applications. You have to figure out what works best for your family.
Other Budgeting Systems:
If you need additional help with creating a budget you can check out this post by the money crashers.
3. Help With Automobile Financing
Children want / NEED to drive at age 14-16. It’s in their blood to beg for a vehicle. Whether it is in your budget to buy them one, finance one or ask them to take public transport. Teach your child all the ins and outs of financing a vehicle and the benefits of buying one outright.
Having self-control to save enough money to buy a car is not easy, but doable. Having that knowledge will help keep them from being locked into car loans for 7 years or more.
Also, help your child understand that public transportation is also ok to use! (Plus it’s better for the environment)
4. You Don’t Need A Mansion For A home
Teach your child that even if you can afford a bigger home but can live in a smaller home comfortably, living smaller is ok. You can save thousands of dollars every year just by living in a small space.
Explain the benefits of living in a smaller space such as saving money and having less to clean!
5. Explain Electricity and Hydro
If your child really wants to learn about saving money, tell them that living with temperatures around 20°C (68°F) during the winter months and keeping warm with cozy socks and fuzzy sweaters, can sure save some big money on your monthly hydro bill. Let them know to make sure to turn off lights that aren’t in use and to avoid having the TV on as background noise.
These days, most people can live without cable too!
6. Tell Them About The Libraries
Teach your littles ones to take full advantage of the public libraries. They can get all sorts of free books, use the internet and even print out their homework. Great ways to save money at the library, and it’s all free to use.
7. Cook Meals At Home
Teach your child to cook!
I know this is an obvious financial habit, but we should all be teaching our children kitchen skills.
I personally found that if I’m cooking a meal at home, I have to have planned it in advance. We keep our meat in the freezer because we buy our food in bulk every month. I also meal plan in my Life Planner every week.
8. Shop In Bulk
Teach your kids the value of shopping in bulk!
We buy a lot of food in bulk, but we also realize that it costs a lot of money to buy in bulk. Our average Costco bill used to be $600 every time we left the store. Ouch.
Teach your kids to shop with a purpose. If buying in bulk, make sure that the price is ACTUALLY saving money. For example, I noticed at Costco I tend to buy things that cost me the same amount if I went to Sobeys.
My favourite things to buy in bulk:
– Meat at Costco
– Toilet Paper at Walmart (When it’s on sale, I’ll grab 2 or 3 packs even if we have the TP at home)
– Canned Food at No Frills (We have Dollar Days at No Frills once in a while and I seriously stock up during that time)
– Laundry Detergent (We have to buy the sensitive skin stuff, and it’s more expensive than regular ones, however at Walmart, the no-name brand is so cheap I normally grab a few if I have room in my cart)
– I also make my own cleaning supplies so I buy Baking Soda and Vinegar in bulk as much as possible.
9. Buy Second Hand
Starting your financial habits can be as simple as buying clothes that are not new.
I don’t know about you but we have Facebook groups after Facebook groups with mom’s selling good quality clothing for pennies just so they can get rid of it. Heck, I have done it myself, just gave great baby stuff away to strangers.
We can find ANYTHING for free or super cheap and haul it back home. I definitely don’t pick up anything that is garbage, but you would be surprised the stuff that people just give away. By the way, if you have items that you need to declutter, sell it for extra cash. Such a simple financial habit to help you save money.
Let me give you an example. When my first son was turning 1, we had Christmas around the corner. I had JUST finished maternity leave and we were catching up on our debt from my year off work, so needless to say, money was TIGHT.
I found a lady giving away a garbage bag of toys for $20. I drove to pick it up and she gave me 2 bags of toys when I arrived. When I got home, I discovered the toys were all in almost brand new condition.
Only 1 child had played with them and they were still so perfect. I gave them a nice wash and put them under the tree. $20 for a tree full of gifts for a baby? YES PLEASE!
I’ve also had the same experiences with clothes for the boys and even clothing for myself. We have a website called Kijiji which is more popular than Craigslist where I live, and you can find anything under the sun on Kijiji.
PS. If you want to earn extra cash, you can SELL your stuff on Kijiji too. I’ve had friends flip furniture on Kijiji and make full-time incomes this way. I mean, I don’t have time for that myself, but if you do, it’s a good “Side Hustle” as they say.
If you need more side hustle idea’s, read my post on the best ways to make money from home.
By the way, you don’t HAVE to buy things second hand to live the frugal lifestyle. Buying high-quality things is also a part of being frugal. Buying less provides less clutter in your home, but buying good quality means not having to buy that item again for a long time.
10. Save Money When Shopping Online
I’m sure you’ve heard of a program called Ebates... it is THE ultimate online shopping money saver. How it works is, every time when you log in to your Ebates account and use a store’s link from their website to make purchases, you get paid cash back.
If you haven’t heard of Ebates, or just haven’t signed up yet, follow this link and get a $10 bonus when you spend $25. It’s also free to join!
PS. If you grab the Ebates browser extension, you can get through to the shopping channel without having to go through Ebates website. (Once you have an account)
If you’re American, you can also get cash back from in-store shopping by simply linking your card to the Ebates website. So simple, but only available for US residents. Darn Canada, get on the train!
Basically, the lesson you want to send to your kids is: Spending Less can lead to a less cluttered home and a simplified lifestyle.
Before you can begin to save money and have good financial habits, you have to have your finances in order (know what’s going in and out every month) and create a budget based on your financial situation.