Tips for parents: Teaching kids to be smart with money
Many parents use summer vacation as an opportunity to start teaching their children responsibility and the value of hard work by promoting healthy financial habits and giving them the tools to do so. It’s also a great time to start teaching our children about financial responsibility and independence, according to youth financial education expert Dean Brauer, the President and co-founder of gohenry.
“With summertime upon us, school routines are ending and the days are getting longer,” says Brauer, who has two children of his own. “This is the perfect time for parents to not only reward their kids for a job well done, but also begin to instill a sense of financial responsibility by inspiring good money habits through the summer. Educating our kids at a young age about the power of money, how to save, how to earn and budget, and how not to overspend can help kids’ build habits that will serve them well into their adult life. Summer is a great time to give our kid’s some independence and promote healthy financial habits.”
Here are Dean’s top 6 financial tips that he uses in his everyday life with his kids, and he encourages parents to share them with their children:
1) Start Working Early: Part-time jobs, household chores, and side-hustles like babysitting or mowing the lawn for neighbors help you understand the value of a dollar and you’ll learn some very important skills that will serve you well for your entire career. Start earning your own money as early as you can.
2) Budgeting: This can start early by giving your kids a regular allowance and then when they’re ready to work they’ll know how to budget. The key is to be clear on what you expect their money to go towards vs. what you will take care of for them. Then let them plan their budget and live within it.
3) Wants vs. Needs: Consciously thinking about your wants vs. needs will help you budget, keep your spending in check, and save before you spend. We all want nice things, and it’s ok to buy the things you want, but until your needs are met it’s wise to wait and save for your wants.
4) Compound Interest: The law of compounding is a key concept to learn. Not paying off your credit card in time and your interest compounding can seriously affect your well being. On the other hand, saving and investing modest sums of money over long periods of time will generate wealth. So start early with this concept and start saving from the day you get your first paycheck even if it’s a small amount.
5) Income and Asset Creation are Different, Work Both Avenues: We all get paid a fee for work whether we earn a fixed salary or a fixed hourly income. It’s important to have steady, reliable income. Equally important is figuring out how to make a bit more than you spend so you can invest those savings into things that can generate a return or long term savings. 401ks, IRAs, ETFs etc are worth starting early on.
6) Chase a Wealthy Life, Not Wealth: Living within your means, working hard and honestly, creating time for things that you live to do and worrying less about shiny material things, and building memories and positive relationships all contribute to a wealthy life. This is what true wealth is!
gohenry, the ultimate kids’ debit card and financial education app, has a mission to help every kid be good with money. Founded by parents, designed for kids and teens, gohenry offers a debit card and app with unique parental controls for kids 6-18. Parents use gohenry to help their children spend safely and learn good money habits, and it also helps to make allowance easy, and to spark positive conversations about money with their kids. gohenry’s Earning, Saving, Spending and Giving features offer kids and teens a practical way to learn good money habits.
The gohenry card is issued by Community Federal Saving Bank, Member FDIC, pursuant to license by Mastercard International.
For more information visit: www.gohenry.com
The gohenry app is available to download on the Apple Store and on Google Play.