How to Teach Kids Financial Independence
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How to Teach Kids Financial Independence
Introduction
Teaching your kids to be financially independent is in their best interest and something they must learn from their parents. Follow these steps to teach them the lessons that will serve them well into adulthood.
Instructions
Difficulty: Moderately Easy
Steps
1
Step One
Make your kids work for an allowance. Pay them to do simple chores, such as taking out the trash or emptying the dishwasher. This will teach them about the value of a work.
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Step Two
Ask your kids to pay for things they want with their own money. By using their own money, the children will be more likely to hold out for the toys they really want instead of buying at random. They will also learn the value of money.
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Step Three
Talk to your children about saving. If there is something they really want, but can't afford, encourage them to save their allowance. Make it a fun game with the goal of getting that special but expensive toy.
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Step Four
Teach your kids about borrowing. If you're shopping and they've forgotten their money, consider buying the toy they want and then making them repay you at home. This will teach the kids that debts must be repaid.
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Step Five
Communicate with your children. Praise the kids when they've spent wisely and discuss the times they've spent poorly. Remember, this is their money so use these times as a teaching tool. Don't get upset when they make a mistake in judgment.
Tips & Warnings
- Get your finances in order before teaching your kids about financial independence. If you tell them to save, but don't do it yourself, they will be less likely to embrace the concept.
- Don't berate your kids too often. To be financially independent, children must learn to reject certain purchases and discover what it feels like to not have enough money to buy something. A cornerstone of financial independence is knowing how to budget.
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