How Do You Make Children Financially Responsible?

Teaching kids the basics of money management can help them develop the skills necessary to achieve financial success later in life. Introducing your children to the concept of earning money and spending mindfully when they are young can help them build a future of financial responsibility.

Opening a bank account for your child is a great way to launch your child’s life-long financial journey. Your child will learn how to use these products and gain the knowledge and confidence they need to get the most out of additional banking products as their needs change. You can start by opening a youth savings or checking account for your child where they will learn about the basics of banking.

You can then teach your child the basics of budgeting and investing. For the child to get comfortable with budgeting, walk them through setting up utilities and budgeting for housing costs like rent, groceries, and fuel for the car for traveling. As your child gets older, choose an area to invest some money, and each month, review the statements with your children so they can see how money potentially grows. If your child sees you using a credit or debit card, teaching them what’s behind that card is also useful. When it arrives, show them your credit card bill and talk about how you need to pay for all those monthly expenses, plus the possible interest. Also teach them about debit cards, too, explaining how money is withdrawn from your checking account each time you swipe the card. You can also give older kids a quick rundown on credit scores, how they work, and why they’re so important.

Encouraging the child to get a job, even part-time, will help your children become more independent and self-reliant. They will learn the value of money, build their confidence and work ethic, and have a greater sense of responsibility. They also tend to gain a new appreciation for the education and effort required to earn the money needed to afford the lifestyle they desire. Your child could also gain a few references that they can use to apply for a full-time job later in life.

In the future, you can introduce your children to financial experts. This can help them understand how money works and what they can expect to be dealing with in the future. Also, talk openly about what they can expect in terms of support for the future. Ask about their plans paying attention to when they anticipate being financially independent. Bring up the topics of career paths too. Help your child determine a basic budget for the lifestyle they plan to lead and assist them in narrowing down their career choices until they have just a few that will support their future lifestyle.