5 Healthy Money Habits to Teach Your Kids

Every parent knows kids learn from what they see. If you stay up late every night to eat junk food, they’ll assume that’s a good habit and most likely do the same on their own. Parents must lead by example, but sometimes you have to get more specific with what you teach your kids.

When it comes to money, you shouldn’t leave anything up to chance. Don’t spend the next few years hoping your kids learn how to handle money before you send them off to college and into adulthood. They could end up in more debt than they can handle, swamping their early adult years with financial stress.

Instead, read about these five healthy money habits to teach your kids. These will set your child up for success so they can take care of themselves long after they move out, which is ultimately what every parent wants.

Make Them Wait to Spend

Today’s culture is all about instant gratification. Whenever you decide you need something, you can order it in a couple of clicks and have it on your doorstep the next day. Your loved ones around the world are a two-second phone call away. Companies pride themselves on how quickly they meet the needs of their customers, which is a double-edged sword.

Kids tap into this instant gratification and get used to the mindset that they should get everything they want immediately after they ask for it. As they grow up, this translates into their financial habits. Whether they want food, clothes or electronics, they’ll spend whatever they have to get it.

The first thing you can do for your kids is to teach them delayed gratification by making them wait to spend their money. They’ll learn responsibility and patience while they wait to fill their money jar up or save their allowance.

Show Them Price Comparison

Another bad financial habit some people get into is buying the first thing that comes to mind. Imagine your kid wants a pizza. You tell them they can order it from a pizza delivery shop or get a pre-made, frozen pizza from the store.

They may want to order the pizza delivery because it’s what they’re used to, but show them how much money they’ll save by buying the frozen pizza instead. It shows your child they can still get what they want while they save money, which is a habit they’ll need when they enter adulthood and have to budget.

Give Them a Savings Goal

Money holds value, but younger kids haven’t grasped that yet. Ten dollars may feel as magical to them as $100, even though it’s much less. A great way to teach your child the value of money is to give them a savings goal.

Introduce them to an allowance based on weekly or monthly chores. Write down their savings goal where they can see it every day and explain that once they save $40, they can get the video game they want. 

As they work to complete their chores and build on their savings, they’ll learn about the value of money and how to grow what they have. The more savings goals they create, the more comfortable they’ll get with putting money away before spending it.

Let Them Make Mistakes

You want the best for your child, but now is the time when it’s safest for them to make financial mistakes. They’ll learn while they still have a safety net at home. Let your kid overspend on a new toy and feel the regret that follows. Explain the idea of buyer’s remorse, and ask what they’ll do differently next time so they reflect and grow from the experience.

Plan for Their Future

Get your child on board with saving for their future. Have them save for goals like a new backpack for school or a gift to give during the upcoming holidays. As beneficial as it is for them to know how to handle money, it’s even better for them to learn how to plan for upcoming expenses.

Kids start learning to count money while they’re in kindergarten, which is when you can start teaching healthy money habits. Show them how to save and value money while they plan for their future. You’ll set them up for a bright financial future when they eventually have to handle money on their own.