With Father's Day this weekend, dads across the country will be celebrated. This is a great day for dads to spend quality time with their kids, and they can make it even more meaningful by preparing them for the future and teaching them about money.
How to establish a household budget
Budgeting is an essential part of financial success and it is never too early to learn. Teaching children about controlling their spending and how to manage debt can be great advice. In fact, there are some great ways to teach this knowledge to a child, such as giving them an allowance and freedom to spend it as they please. This type of exercise can help teach children responsible spending and saving habits.
Credit card debt leads to future sacrifices
Another great lesson to teach a child is that taking on too much credit card debt can lead to sacrifices in the future. One way of successfully teaching this to a kid is to allow them to purchase toys as long as they pay it back with their allowance in the future. Every month that they don't repay their debt, parents can reduce the amount of time they are able to use the computer or watch TV.
Spend less than you earn
In addition to teaching children about debt, dads should attempt to inform them about the practice of spending less than they earn. This can be taught similarly to how parents can teach their kids about credit card debt, by giving their children an allowance and a "line of credit." If they spend all of their money, and start buying toys on credit without repaying their debt their luxuries should be taken away. The hope is that this would teach a child to spend less than their allowance each month, which can be valuable later in life, especially when they have their own bills.
Be a financial role model
Perhaps the best way to teach a child about successfully handling finances is to be a good role model. Parents who don't use their own money responsibly likely aren't the best examples for their children. That being said, people who want to have children who can handle their own finances when the time comes should do their best to stay on budget and never overspend.