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When I was in my 20’s I made a lot of financial mistakes. It was no one’s fault but my own, however I sometimes wish I would have had some more formal conversations about budgeting either at home or in school when I was my daughter’s age and older.
My daughter is 12 and I think now is the perfect time to talk to her about the importance of budgeting as well as the importance of protecting her financial future both in the long term and short term. I am very protective of her financial future when it comes to giving her the tools to succeed. Here are some ways that we talk about finances, life insurance and her future.
How to Teach Tweens About Money, Budgeting and Life Insurance
Talk about the importance of credit. This was one place I really messed up. I thought that since I was being offered credit cards, it must mean I should take all of them. I am embarrassed to say I took out too many and this ruined my credit in a large way. You don’t have to go deeply in depth about credit at this age, but it should be mentioned in passing to prepare for bigger conversations down the road.
Open a bank account for your preteen. Many banks and financial institutions have bank account programs made just for kids this age. They often include free classes for kids that teach them about finances as well as high savings interest.
Allow your preteen to get in on your household budget plans. Show them how you budget and how you plan for things like savings and big purchases. The best way to teach your child how to budget is to lead by example. If your preteen is older like mine is, a good exercise is to allow them to create a small portion of the budget such as the weekly entertainment one or or make it a game to find money in the budget for a fun family outing.
Help your preteen create their own mini-budget. If your child gets allowance, birthday money or babysitting money, help them create a budget with it. Don’t try to be too controlling as saving for something big should be their choice and the budget should allow for some flexibility just like your own does. You also want to give your child a chance to make some mistakes so they can learn from them early on.
Lead by example. Protecting your family’s financial future is more than just savings and watching your credit score. It can be things you do to protect it should something happen to you. Talk to your child about the importance of things like life insurance, home insurance and investments like stocks and bonds. This may be a difficult conversation to have, but it should be stressed that it is important.
By the way, I found a great website with more information on being protective of your financial future.
What is something or someone you are most protective of in your life?