A well-known proverb says if you train a child properly, they'll remember that training when they've grown. That's probably especially true when it comes to their finances. Even when they're too young to understand money, what you teach them will affect how they deal with finances throughout their lives.
Let's look at 13 things you can teach your kids that will improve their financial futures:
1. Teach them that 'hand-me-downs' are acceptable. It's easy when they're small to get them used to secondhand clothes and toys. They'll accept it as a natural part of life. When they grow up, shopping at thrift stores or buying a used car will be easy for them.
2. Teach them to share with others. Kids learn “that’s mine” very easily. Learning to share will pay greater dividends. Whether it's sharing an apartment with a roommate or a snow blower with a neighbor, sharing will save money throughout their life.
3. Teach them to save some of their income. Just because grandma gives Junior $20 for his birthday doesn't mean he has to spend it all. Have him save $5 and spend the rest. If he learns that lesson now, he may avoid falling into credit-card debt as an adult.
4. Teach them to cook. Groceries will consume a large part of their budget. especially if they have to eat convenience food, fast food, and at restaurants. With tools like slow cookers and microwaves, there's no reason not to learn some basic food preparation skills.
5. Teach them to appreciate a job well done. Yes, it's good to cheer on their efforts. However, it's also important for them to learn to complete a task. Their future employers will thank you.
6. Teach them patience. We've all smiled at a 4-year-old demanding "I want it now!" It's not so funny when they're 24. That lack of patience will likely cause them to buy things they don't need and to pay too much for things they do need.
7. Teach them patience—part two. We'd all like our investments to double overnight, but if we learned patience as children, we’d know that's not possible. Knowing that will also enable us to avoid financial scams.
8. Teach them to entertain themselves. Kids can have great fun making up games. They'll learn to be responsible for their own entertainment, which will help them avoid expensive vacations and cable packages as an adult.
9. Teach them to be generous with the less fortunate. Not just because it's good, but because it will help them when they struggle. It's easier to face financial challenges when you realize that you're not alone and that others have it even harder.
10. Teach them to accept “no” as an answer. They'll hear it when they ask for a raise or apply for a loan. If they throw a tantrum like a two year old they'll make the situation worse for themselves.
11. Teach them about compound interest. Money earning more money could make them a fortune during a lifetime. But if they allow themselves to build up credit-card debt, they'll struggle with compound interest.
12. Teach them to think through a problem. The ability to analyze a problem, consider alternative solutions, and then follow a solution to a successful conclusion is invaluable. This is especially true in terms of personal finances. Your child will face problems—knowing how to respond to those problems will make life easier for them.
13. Teach them to lose gracefully. When they grow up, there will always be someone with a bigger house or fancier car. Believing they always have to “win” could cause severe financial stress.
Being a parent is a big responsibility—and often a hard one. But, as the proverb says, the things you teach your children today will pay dividends for the rest of their lifetime.
Gary Foreman is a former financial planner who founded TheDollarStretcher.com. The site features thousands of articles, including Financial Advice for a Picky Eater.