Right now, Americans are over $1 trillion in debt, according to a recent Federal Reserve survey. There are many reasons for this, including high inflation, high gas and grocery prices, and even stagnant wages, but many of us simply struggle with good money management. We have all dealt with debt, but your kids can skip the struggle if you start teaching them how to handle money early and stick to a budget.
The most important lesson you can give your kids is the importance of not only earning but managing money and that it should be a tool to help them reach their goals and live a nice life, not a source of debt and stress. The earlier you start teaching your kids about money, the better — and you have the tools right at home. Here are a few tips on how to help your kids get good with money and stay out of debt as adults.
Sit down and create a budget
Most financial struggles are due to not operating with a budget. You have to know what is coming in, what is going out, and why. When you end up with more month than money, it’s usually because you don’t know where your money is going. A budget helps with this.
A budget also helps with planning ahead and saving money. Sit down with your kids early and explain the household budget so they understand necessities versus indulgences and how to allot for each. The earlier you introduce them to budgeting, the better. It’s easy for kids to think money just exists, or that “money grows on trees” because everything is bought for them. Show them what a budget is and how you use it.
Use an allowance as a teaching tool
It’s an age-old technique, but giving your kids an allowance is an excellent way to start teaching them about money — but don’t just give it to them; allow them to earn it. Tie the allowance to chores around the house or grades in school so they understand that they have to work for money and learn the habit early on. Work…
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