How to teach your kids good money habits that will last a lifetime

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Want to teach your kids the value of a dollar? Follow these four steps.

Avoid offering your child instant gratification — a child can adapt to being patient and waiting for a reward. “My son wants to play, literally, nonstop and he wants to play right now. And so I'll say, 'five minutes — give me five minutes, and then I'll play with you,'” DeGaetano said. Similar to putting money in a savings account and keeping it aside for a special thing they want to buy, it will take some time. Patience is key.

While they’re still young, you can show children how earning and allocating real money works on a smaller scale before they reach adulthood. For example, you might introduce investing by creating an incentive. For example, if they earn a certain amount of money for chores and put it in a savings jar rather than spending it, you could offer to match it, DeGaetano suggests.

As they get older, you can build a budget for your grocery list and have your child help you stick to it. No matter the age, children will want to buy fun, new things. Whether it be a toy or a car after getting their driver’s license, it’s a great practice to say “Sure, you can have that — if you save your own money and can afford it,” Palmer explained. By the time they leave home and have to manage their own budget and credit card at college, they’ve had years of practice and are in a better position to avoid credit card debt and other money troubles.

 

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