Power Women Investing's Guide to Raising Financially Responsible Children

Raising children is no easy task, that’s why we sat down with owner of Power Women Investing, Tiana Ronstadt, to get her expert advice on how to raise financially responsible children. Make sure to head on over to her website if you’re ready to take control of your finances.

Tips For Raising Financially Responsible Children

Start an allowance : “A weekly allowance for chores around the house is a must! People are more prone to safeguard money they’ve worked for rather than money they’ve been given. Allowances encourage budgeting and good saving habits. Give them opportunities to earn more money for doing extra work to instill the concept that working harder usually pays more”

Implement the ‘three jars’ system. (Like our banks!) : “ his system is great for tangibly illustrating the concepts of saving, spending, and giving for younger kids, but it can also be done using smartphone apps (such as Rooster) for older ones. Label three jars or accounts: save, spend, and share. Have kids decide what portion of their allowances or paychecks goes into each. The money put into ‘save’ can be invested, or held longer-term for larger toys or events. The money in ‘spend’ goes toward discretionary spending. And the money in ‘share’ goes toward a charity of their choice. If the charity allows it, make your donation while volunteering for an extra meaningful experience!”

Open a savings account with a debit card: “ Research banks to educate your kids about interest rates and how compound interest impacts a balance over time. Go with them to open their first savings account and ask about issuing them a debit card. Show them how their savings can grow, and how debit card purchases can impact their balances.”

Set a good example: “ Your children listen to everything you say and do, so stay positive about money, share abundance, be grateful, and be conservative with your spending.”

Encourage a habit of saving: “ Spending habits are obvious, but the act of saving is typically invisible. Teach through intentional and frequent conversations about your savings goals. Let them set and reach savings goals themselves.”

Present money-making opportunities: “ People place more value on the money they’ve had to work for than the money they’ve been given. Providing an allowance in exchange for chores or encouraging earning from odd jobs provides an opportunity to comprehend the value of hard-earned money while learning the power of saving.”

Promote smart spending using budgets: “ Budgets help create a clear distinction between needs and wants, which becomes more and more important as kids grow and begin spending their own income. Work with your kids to show them how impulse spending can impact their budget and their savings’ growth potential.”

Educate them on how money grows: “ Teach your children about compound interest. Bank that allowance and help them see their money grow!”

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