Preparing Your Kids to Handle Money | Cleveland Bradley County Teachers Federal Credit Union

Do you spend time talking about finances with your kids? In the midst of busy schedules, you may be lucky to just see your kids at all during the day, especially as they grow older and more independent. Finding time to talk about anything can be a huge challenge.

But teaching children about money from an early age can help better prepare them to be financially independent and build a strong financial future for themselves. Helping our kiddos create and maintain a budget becomes especially important when they are ready to leave the nest.

If you have a high schooler or a newly minted college student, help set them up for a solid financial future by preparing them to handle money well.

Make a Budget

If you google “budget,” the hits you get will be endless and differ in more than a hundred ways. Sorting through all the advice, apps and everything else that is out there can be challenging, particularly if you are dealing with older teenagers who would likely prefer to do anything but talk about finances.

Instead of setting your kids off on their own google rabbit hole, talk with them about how you run the household finances. Tell them what expenses are like each month, and help them break those expenses down to a more realistic version of what being on their own will be like. If they have a job, help them determine what their monthly income is, and then encourage them to subtract out their expenses.

For most students who live at home, rent, gas and groceries aren’t going to be an expense they account for. If your kids are getting ready to head out on their own at college or otherwise, give them an estimate of what these items are going to cost. Writing out a zero-expense style budget can help them grasp the reality of income versus expenses. Even if they don’t stick with this kind of budgeting practice, it’s a good place to start.

Once they do have a more realistic sense of what life is going to cost, encourage them to hit some of those google responses up and find a way to budget they are most comfortable with. The best budget is one you will use!

Encourage Financial Education

Sometimes a good dose of reality like writing out actual expenses can be enough to help a student be more mindful of their finances. Understanding how much an outing with your buds really costs is a great way to encourage engaging in more at-home days or free events instead of heading to the movies and a restaurant.

Once you feel like your kids are beginning to understand income vs. expenses, encourage some more in-depth financial education. Take them to the bank to create checking and savings accounts, and let them discuss the possibility of moving a small amount into savings automatically each month in order to establish an emergency fund.

Work with them to establish financial goals. While we may not be ready to encourage retirement accounts for our high schoolers yet, they can still set a savings goal, a monthly “fun” expense goal and even an earning goal. Even though we always want our kids to reach for the sky, you may want to remind them of the reality of everyday expenses so that they don’t set goals that will leave them overworked and stressed out as they try to attain them.

Give yourself some grace here, too. This won’t be an overnight process, and even the most financially minded kid could end up blowing his or her budget on one fun night out. Continually encourage them to find ways to stick to their budget and build on their goals—and rest a little easier knowing you have laid the proper foundation for your kiddos to have a solid financial future!

Ready to talk more about building the best financial futures possible for your whole family? Contact us to get started.