Advertising
Advertising

5 Fun Lessons to Help Make Your Kids Financially Independent

5  Fun Lessons to Help Make Your Kids Financially Independent

Formal education does a great job of teaching children how to read, write, do math, and determine the age of the earth using mass spectrometry, but there’s one lesson that still falls on the shoulders of parents to teach, and that’s financial responsibility. Until there is a classroom devoted to budgets, savings accounts, and investments, parents will need to continue to think of creative ways to impart their monetary wisdom. Use these five fun tricks to help make the lessons stick and help make your kids financially independent.

1. Piggy Bank

Advertising

piggy-94139_640

    A piggy bank should be a fixture in every child’s room. They’re as important as a night light or pajamas with feet built into them. Every chance you get you should drop some change inside, shake it up, and act like it is the greatest thing in the world. Your child may not fully appreciate what is going on at first but eventually they will develop a sense of ownership over their money and create positive memories and attitudes around saving.

    2. Lemonade Stand

    Steven Depolo lemon
      Steven Depolo via flickr

      Tried, tested, and true, the lemonade stand is not only a classic memory for every child, it teaches important lessons about money. By dishing out lemonade to passersby (with adult supervision, obviously) a child can quickly learn basic lessons about supply, demand, and managing income and expenses. Fresh lemonade may taste better and draw a bigger crowd, but nothing multiplies your margins like lemon crystals from a package. Do this right and lend a hand where necessary and you will have a little entrepreneur on your hands in no time.

      Advertising

      3. Allowance

      allowance

        Starting from around the age of five you can bring an allowance into the equation. Sit your kids down and have a conversation about responsibility and pitching in around the house in exchange for a little money at the end of the week. An allowance should be your child’s first experience with steady, reliable income and it opens the door to many more lessons about the different uses of money, that things are earned and not an entitlement, and the idea of money as a finite resource.

        Advertising

        4. Saving, Spending, Sharing Jars

        moneyjar

          A great way to drive home the finite nature of money is to expand the notion of the piggy bank to create separate saving, spending, and sharing money jars. Again, this works best with an older child who is getting an allowance. The way it works is each time your child gets some money, they are responsible for dividing it into each of the three jars. The spending jar is for things like candy bars and water guns and other small expenses that pop up during the week; the sharing jar is for buying birthday gifts and nice surprises for friends and family; and the saving jar is off limits for everything but larger, longer-term expenses like a new Lego set or video game. The saving jar transitions nicely into the eventual savings account you should open with your child at the bank.

          Advertising

          5. Offer and Encourage Ways to Earn More Money

          chores

            Finally, if you child has their eye on some extravagant item like roller skates or a new bike but is getting frustrated at saving towards it with a $5 or $10 weekly allowance, give them other opportunities to increase their income. Put a price on household jobs that aren’t part of their regular chores. Clean the attic and make an extra $10. Mow the lawn and that is $5 in your pocket. Even help your kids offer their services to your trusted friends around the neighborhood. This will help instill a strong work ethic and a mental connection between effort and reward.

            Featured photo credit: Steven Depolo via flickr.com

            More by this author

            8 Benefits of Running 5 Minutes Every Day You Didn’t Know 10 Common Job Hunting Mistakes You Need to Avoid 8 Keys to Success from Jack Ma, Self-Made Billionaire and CEO of Alibaba This Is Why Recent Graduates Should Join a Start-Up 5 Fun Lessons to Help Make Your Kids Financially Independent

            Trending in Money

            1 How to Develop a Millionaire Mindset in 6 Simple Steps 2 How to Eat Healthy on a Budget (The Definitive Guide) 3 9 Millionaire Success Habits That Will Inspire Your Life 4 Top 5 Spending Tracker Apps to Manage Your Budget Smart in 2020 5 How to Set Financial Goals and Actually Meet Them

            Read Next

            Advertising
            Advertising
            Advertising

            Last Updated on January 21, 2020

            How to Develop a Millionaire Mindset in 6 Simple Steps

            How to Develop a Millionaire Mindset in 6 Simple Steps

            We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

            It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

            How do you go about developing that millionaire mindset? By following these simple steps:

            1. Focus On What You Want – And Take It!

            So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

            Millionaires play to win, not to avoid defeat.

            This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

            Advertising

            2. Become Goal-Orientated

            It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

            Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

            Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

            Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

            You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

            If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

            Advertising

            If you are to become a millionaire, you need to start accumulating money.

            Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

            3. Don’t Spend Your Money – Invest It

            The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

            Stop working for your money and make your money work for you.

            Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

            There’s not just the stock market — there’s also property, and your own education.

            Advertising

            4. Never Stop Learning

            The best thing you can invest in is yourself.

            Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

            Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

            Learn everything you can about how economics works, how the stocks markets work, how they trend.

            Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

            Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

            Advertising

            5. Think Big

            While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

            There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

            Aim for the stars, if you fail you’ll still be over the moon.

            6. Enjoy the Attention

            To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

            Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

            If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

            Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

            More About Thinking Smart

            Featured photo credit: Austin Distel via unsplash.com

            Read Next