More than a million people in America declare bankruptcy every year. Certainly the difficult economy and unemployment situation are big factors. However, often people get into debt merely because they overspend. Teach your kids about money and savvy shopping at a young age to help ensure their financial future.
Start when they’re young
From the time they are toddlers, children can start learning about money and shopping. Take your young kids with you to the store on a regular basis so that they begin to get familiar with the concept of exchanging money for goods and services. When children begin to learn to count, you can have them count coins and explain the different denominations.
Take them to the bank
Give your child a piggy bank when they are very young, and place coins in it on a regular basis. When kids get a little older, you can take them with you to the bank. Show them the similarity of making a deposit in the actual bank and saving in their piggy bank.
Read more about money lessons for life >>
Play store at home
Set up a play store at home and teach your little ones about shopping. Show kids how money is exchanged for the things they want. At around the age children go to school, you can also talk to them about being charitable and donating money or time to those in need.
Do price comparisons
If you want your kids to grow into savvy shoppers, you need to set a good example and be one yourself. Whether you’re shopping online or at the grocery store, show your kids how to do price comparisons to determine the best deals. Show them how to search for coupons and sales in the newspaper and on the Internet.
Read about what you can save by doing price comparisons >>
Shop at discount stores
Head to the dollar store and other discount stores to teach your kids about quality vs. cost. Do they want an easily breakable toy now from the dollar store or do they want to wait and save for a more expensive, high-quality toy (that’s less likely to break easily) from another store?
Open a joint savings account
When children get older and are earning money from odd jobs, open a joint savings together. Talk about interest and the value of letting your money grow.
Read these tips for kids’ checking and savings accounts >>
Steer them away from credit cards
Many young adults get into financial difficulty because of credit cards. It’s very important to explain to your teens the dangers of falling into credit card debt. Discuss the high interest rates, late fees and potential damage to their credit reports.
Involve them in the family budget
When kids are old enough, involve them in your own family budget. Family finances don’t have to be a secret. Allow them to be involved in setting the monthly budget for things like groceries, personal items, entertainment and other categories.
Though you can’t guarantee your kids won’t get into debt when they get older, you can lay the groundwork for a successful financial future by teaching them to be savvy shoppers from a young age.