As children grow older and begin to understand the value of money, how are we parents supposed to teach them how to be smart about it? Bestelling author Rachel Cruze has three tips to help us.
Cruze, who works with her father Dave Ramsey, revealed her tips in a new Prager U video. According to Cruze, we need to start teaching our children smart money management principles at a very young age. She compares it to learning a foreign language.
“Learning a foreign language at 4 takes a lot less effort than learning one at 40,” she says. “The same holds true with managing your money.”
So what are her there principles?
1. Put your kids to work, and pay them when they do.
“It’s very important that your kids understand that money comes from work, not mom and dad’s wallet,” she explains. “There are a million things they could do.”
2. Let your kids make mistakes with their money.
“Many adults make expensive mistakes, because as kids they were never allowed to make small, inexpensive ones,” she says. “Tears now will save a lot of tears later.”
3. Teach your kids to make saving a habit.
“Saving money is a discipline,” Cruze says. “Teach your children that saving money is one of the first things you do when you get paid.”
Watch the entire video below: