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If you want your children to be financially literate after summer, you may want to encourage them to earn money during their free time. There are a lot of fun activities that can help them earn extra cash and if they choose the right one, it could prove to be quite educational too. Pointing out the things that they can buy with their own money might motivate your kids to go along with your idea.
Of course, you will encourage your children to earn an income - not just for the sake of having money to spend, but also to help them learn a thing or two about personal finances. The road to financial literacy is long and they will benefit a lot if they start their lessons at a young age.
When children are taught the right financial habits and concepts, they are more inclined to succeed in life. Developing the habits early on will help them make the right decisions at an early age. We all know that among the first financial decisions that your child will make involves student loans. If the right financial concepts and habits are instilled in them early on, they are bound to choose the right path when it comes to their student loans and other college expenses.
According to an article published on USAToday.com, teens are expected to be financially competent before they enter into college. The article cited a study done by the Organization for Economic Cooperation and Development that revealed how the US only ranked 9 out of 18 countries when it comes to teen financial literacy. Obviously, there is a lot of room for improvement - considering the fact that the student loan problem already reached its trillion mark.
Although efforts are being made to improve the curriculum to include personal finance lessons, we all know that a financially literate individual is shaped at home. That being said, you need to realize that motivating your children to earn money this summer can be a great step towards a successful financial future.
Encourage your kids to make money this summer
According to FinancialEducatorsCouncil.org, financial decision making can be influenced by proper information, giving incentives for good decisions and allowing them to apply the information in real-life situations. When you are in your preteens, the best way to learn about money management is to start earning money.
The best age to encourage children to earn money is during their preteens or tweens. This is the age wherein they shift from being shy to becoming more independent. The idea of earning their own cash would appeal to them so convincing them to get a part-time job would not be too hard to do. Of course, you want to make sure that the job they will choose will not suck the fun out of their summer break.
Here are a couple of options for your preteens to earn money this summer.
- Babysitter. In truth, babysitting jobs for preteens have changed over the years. Parents will rarely leave their young ones with preteens and would opt for older babysitters. However, tweens can be hired to babysit just so the parents can do chores around the house. They simply have to keep the kids occupied to give the parents some peace and quiet for a few hours.
- Senior helper. Another option for preteens is helping out the elderly. Some of these seniors simply need someone to be with them for a couple of hours so they will not feel alone. Your child can help out around the house too like sweeping or putting some things around the house in order.
- Dog walker. Some busy neighbors may be in need of someone to walk their dogs. This is a job that preteens can also opt for. It will only take a couple of hours to do this and can help tweens earn money easily.
- Pet sitter. Speaking of animals, you can also encourage your kids to look after the pets of vacationing neighbors. Summer is a time to travel for some families and your kids can help look after any pets that will be left behind.
- Gardener. This job involves simple tasks like mowing the lawn, trimming the bushes or keeping the garden clean. Cleaning the garden can be time consuming - something that some neighbors may not have time to do.
- Car washer. Another job that your kids can opt for is washing cars. Have them go around the neighborhood to offer this service. It can be a once a week thing - depending on the needs on the person who owns the car.
Once your children starts earning money, it is your chance to teach them smart money management skills. They will be tempted to spend everything at once. You need to stop them from doing this by teaching them the right money habits.
Financial lessons children can learn while earning an income
In a report published on Archives.gov, it is revealed that a lot of kids do not know enough about money management. At least, it is not enough to make them responsible money managers when they grow up.
Since you have started by encouraging them to earn money during summer, you may want to continue by teaching them a couple of things about personal finances.
Here are a couple of lessons that you may want to discuss with them.
- Value of money. By earning money on their own, you are teaching your children the value of money. They now understand that money do not grow on trees. You need to work hard to earn them. That should keep them from being too insensitive when asking money from you.
- Budgeting. You may want to give them a lesson or two about budgeting. In case they want to stop working for the summer, you can teach them how to stretch their money so it will last until before school starts.
- Saving. Instead of spending their hard earned money, you can encourage your kids to save. This is a great lesson for those who have recurring jobs. When they get their first paycheck, encourage your kids to save it so they can buy something more expensive at the end of summer. Or you can encourage them to save the whole paycheck for next year so they can go on a vacation or something.
- Investing. As you are teaching them about saving, you may want to explain a bit about investing. For instance, you can discuss with them the value of saving up for their college fund. To maximize the growth of the money, discuss with them how investing can help increase their money in ways that a savings account cannot.
- Smart spending. In case your child wants to spend their money, teach them how to do so in a smart way. While saving is a great idea, your kids deserve to enjoy the money they earned. Let them decide but encourage them to spend their money on things that will enrich their lives even further.
Take note that there are several options to make financial lessons appealing to kids. It does not have to be boring. In fact, there are ways to teach financial lessons through cartoon shows. If your child is interested in sports, you can relate financial concepts to that too. Or you can point out prominent individuals who have made good decisions with their money. You can also discuss individuals who have made mistakes. It really depends on what you think your kid can relate to. In time, you may be able to discuss with them what credit is and how it can affect your life positively or negatively - depending on how they react to it.
Here is a video that will give you tips on how to teach kids about personal finances.