It’s up to each of us to make sure we give our kids the knowledge of personal finance that they need. Fortunately, there are common-sense ways to pass along good financial habits.
Here are seven tips that can help you teach your kids about money, starting with the steps to take with younger children and progressing through lessons as they move toward adulthood.
1. Give an allowance. Earning an allowance can introduce kids to the value of money and making choices for themselves. Start when your child is little and consider tying part of the allowance to chores.
2. Emphasize savings. Kids are likely to eventually want something that costs more than what they have in their piggy bank. That’s your chance to teach them how to save.
3. Encourage a summer job. A Schwab survey shows that when young people have jobs, they are likely to be better savers later on. You can make sure your child is saving a bit from every paycheck.
4. Introduce investing. As kids get older, you may decide to open a custodial brokerage account and let them choose stocks. It’s generally best to work with an advisor to do this, as there may be unique tax considerations.
5. Teach them about credit. Consider making your child an authorized user on one of your credit cards. There are practical reasons, such as having the card to use in an emergency. But this is also about teaching them how to borrow and spend responsibly.
6. Help your child set a budget. During college or after they graduate, talking them through the process of setting a budget will help them better understand how they are spending their money.
7. Encourage good investing habits. As your child gets older and perhaps has retirement benefits through their job, help them understand their options.
Don Daigle is an Independent Branch Leader and Financial Consultant at Charles Schwab with over 29 years of experience helping clients achieve their financial goals. Some content provided here has been compiled from previously published articles authored by various parties at Schwab.
Don Daigle
Branch Leader
2184 North 2nd Street
Millville, NJ 08332
856-506-3412
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