4 Financial Steps to Take Today Your Kids Will Thank You For

Instilling positive habits in our children is one of the greatest goals that parents have. 

When it comes to financial matters, this can be a really difficult feat. Many parents are smack dab in the middle of their own journeys to financial success, so teaching kids how to start their own journeys can be really challenging.

For those navigating the murky waters of teaching your children healthy financial habits while still learning them for yourself, here are some tips to help you along the way.

Let your kids ask questions about money. And answer them!

One way many parents set their kids back on their financial journeys is by avoiding any and every money conversation that kids bring to the table. Talking to your kids about money - such as saving, spending, and other financial topics - can be really uncomfortable. Yet these conversations are important for their development into financially stable adults.

If you don’t feel you have the background to provide solid financial advice quite yet, look into some literature on the subject! Robert T. Kiyosaki’s Rich Dad Poor Dad, and the platform he’s built from it are full of helpful advice on raising financially conscious children and unlearning some of the unhealthy money habits many adults have. Let your kids know that this is a journey you’re on together, and learn alongside them.

Give your kids space to manage their own money. 

Many parents think that it’s best to keep their kids in the dark on money management in their day-to-day lives. And, to a certain extent, that is necessary. While kids should not be involved in your personal finances, giving them a controlled environment to experiment with money management can really benefit them in the long run. 

Children of all ages can participate in money management practices in different capacities. You just have to meet them at their level, and trust them to learn at their own pace. There are lots of fun ways to teach kids about money management, and the lessons they learn along the way can help them become more financially successful adults.

Instill a positive outlook on financial matters.

A huge part of achieving financial freedom is having faith that it’s within reach. If you always believe that someone else is more deserving or capable than you, you’re bound to hold yourself back. Knowing that you can achieve financial success and deserve to do so is a simple yet impactful step in the right direction.

When speaking to your kids about money, make sure you foster an abundance mindset rather than a scarcity mindset. This comes down to the way you speak about money and other financial matters. 

For example, let’s say your child wants a toy that is $50 but you have a $30 budget for this shopping trip. Let’s take two different approaches to this matter and unpack the results of both.

Approach 1: “We can’t afford that. You should pick something else.”

Approach 2: “That toy is outside of our budget right now. We can either save up and get that toy next time, or pick something else for now.”

Approach 1 embodies a scarcity mindset and does not allow the child to make a financial decision for themselves. They’re told they do not have enough and therefore will likely go on believing there are certain things that are simply outside of their reach. 

Approach 2 embodies an abundance mindset. The child is able to take an active role in choosing whether to save or spend and is likely to learn their financial future is in their own hands.

Walk the walk.

Your children are constantly looking up to you and observing the habits you have. One of the simplest ways to instill positive money habits in your kids is to practice them yourself. If your kids see you set financial goals and achieve them, they’re likely to want to do the same.

If you try something like giving your kids labeled envelopes or jars to save their money in, maybe have your own as well. That way, they know that the work they’re doing to save is truly meaningful. As long as you’re demonstrating the ways positive financial habits can impact your life, your kids are bound to see and model those same habits themselves!

Looking for more ways to build positive financial habits for your family? Gretchen Rehm Financial provides quality service and lifelong financial well-being through a full range of tailored insurance and financial services products. We will walk you through designing quality financial plans and insurance coverage to meet your needs and your budget. We are your local independent insurance agents and financial professionals of choice in Minnesota! Get in touch, today.