7 Good Financial Habits to Teach Your Children

imagesWe all pass on traditions and personal traits to our children. Why not pass on good financial habits too?

Maybe you’re thinking, “I’m not too good with money, how can I teach my kids?”

That’s a good question.

You may not be good with money yourself, but you do know some basics that you’ve heard again and again. I’m going to share a list of good financial habits to instill in your kids and yourself.

Here is a list of things that will improve your children’s financial futures:

1. Save some of your income. This isn’t rocket science. However, it can be easier said than done. If you save 10% of every dime you make, you’ll be better off. Chances are if they do it consistently, debt may never be a problem.

2. Deferred gratification. We live in a country where consumerism is taught from an early age. Waiting and saving for something can be very satisfying. Show your kids that saving and waiting doesn’t mean they won’t get what they want, it means it may take a little longer. It also may keep them from the crushing misery of debt.

3. Patience. As an advisor I’d love to double my clients’ money overnight. By teaching them how investments grow over time, they’ll be less likely to fall for financial scams.

4. Compound interest. Show your children how to get on the right side of interest. Give them examples of how a small investment can grow substantially over time. You may also want to show them how paying interest to others can be detrimental to you financial health.

5. Self sufficiency. Being able to do basic maintenance on your car or home, or even how to cook can save you thousands of dollars over time. If you are handy fixing things or an excellent cook, have your kids help out. My Dad showed me how to have a green thumb and it’s been beneficial having a home with a yard.

6. Generosity. Teach your kids the value of giving. Not because it’s a good thing, but it will help them when they struggle with money. It will show them that there are less fortunate people in the world than them and that they are not alone.

7. Use their brain. Show them how to think through their problems and consider alternatives. This will be especially valuable with personal finances. When a financial challenge presents itself, they will have the ability to look at the problem from all angles.

There are many more things I could list here. The main point is that you know more than you think about finances. Plus, your parents probably gave you the knowledge in more than a few of these too. Use money as much as possible as a teaching tool. Your kids will benefit from it the rest of their lives.

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