Teaching your kids about managing money can be among the most important life skills that parents can teach their kids. If you can avoid debt problems and save for things you want as well as retirement, you should have a pretty good life. At least financially. It is never too late to begin teaching your kids about managing money. Even pre-teens, young adults and even older adults can benefit. So what are the things you should do to help people and kids start learning about money? How to manage money and how to avoid getting into problems later in life over money?
Teaching Your Kids About Managing Money
These points are listed in general from an age perspective. However many can be applied even for older teens and adults:
- Save 10% of all income, including allowances and pay checks
- Pay an allowance
- Assign age appropriate tasks tied to their allowance
- Open a savings account to teach about saving
- Establish emergency savings
- Establish goal oriented savings accounts
- Young adults should start saving for retirement
- Learn the power of compounding interest rates and income
- Older teens should obtain a credit card to learn about credit, debt and credit ratings
- Start saving for a down payment on a home
- Learn about debt ratios and the 35% rule
We will expand on this list. We will also xplain some of the items in our next post about teaching your kids about how to manage money.
For more posts about life style issues, click here.