The secret to long-term success lies in teaching children. As parents, we want to do everything in our power to set our children up for success in life. One important way to do that is by teaching them how to handle money wisely. Here are tips to help you get started.

Set Goals

Help your child establish small attainable goals by using the visualization technique. The more they can see their desired outcomes, the easier it will be when setting bigger ones later down the road.

For example, make a chart with stickers or drawings that visually represent how much money has been saved each week. If they want something more tangible, speak with him/her about specific items they want instead- this will give more meaning behind all those numbers.

This is a great habit that applies well beyond money and can help both at school and work.

Patience

To achieve any goal, including financial ones, you need patience. Building this habit takes time but by helping our children learn how valuable it is, we can remove the need for immediate reward.

One of the best ways to teach your children about patience is by giving them the choice between an immediate reward or waiting for something better. This can be as simple as letting them choose between getting candy now or saving towards something more rewarding, such as their first bike.

Value

Teaching your child how to spend is a crucial life lesson that will form the basis for future financial success. Put their skills into practice.

If you want to teach your child about the value of money, why not give them some spending power? Place your child in the position of making a real purchase and they’ll remember more from their own experience than anything you can simulate for them.

Activity & Earnings

Teaching children to save can be easy and fun with a little planning. Start by determining what chores they can do and how much each of those tasks will pay in total (i.e., washing dishes may be worth more than picking up toys).  Your children will learn how to choose and take responsibility for their own chores, just like professionals!

A great idea would be to make charts showing progress over time. Seeing their hard work pay off will motivate them even more. We all know there isn’t anything better than seeing numbers grow.

Savings Account

At this point, your child is ready for the next step in financial independence: actual saving.

It is time now to start a personal savings account for your child. Consider asking the banker to discuss the benefits as to why it’s important to save, hearing this from someone other than Mummy and Daddy can make the process feel more personal. Take them on a monthly trip to their local bank, where they can deposit and see how much money has been saved or taken out. This will help them feel more responsible by playing an active role in managing their money.

Compounding

The power of compounding is a big deal for adults, but it can be hard for your child to understand and appreciate the importance right away. That said- planting that seed now will pay off later!

You may be able to inspire your child by showing them a table that shows the effects of saving money over an extended period.

Build Credit Responsibly

The earlier teens start to build their credit, the better. That’s because establishing an accurate record of repayment history will help them secure low-interest rates and even employment opportunities down the line! If they need a house or car after college, which most do, then starting early on can save hundreds of thousands in total payments.

We would prefer to have our children make a credit mistake and learn from it at home, rather than on their own.

Be an Example

The apple doesn’t fall far from the tree. When children see how organized parents are with managing their family budget, they learn early on that being financially responsible is something worth modelling.

You may not think they are, but our kids watch and listen to every word that comes out of our mouths. They’re learning about how they should handle money. If we spend without thinking twice, then there’s no telling where this could lead!

The best thing we can do is to be a good role models ourselves!

Teaching your children about money is one of the most important things you can do for their future. Not only will it help them become financially responsible adults, but it will also give them a good foundation for other areas of their lives. With these tips, you can start teaching your child the value of money today and set them up for a lifetime of success.