Teaching Your Children To Become Fiscally Responsible

Defining Fiscally Responsible For government institutions, fiscal responsibility describes the ability to balance government spending and income taxes. How fiscally responsible is the federal government?  The federal government’s spending on public programs exceeds the income taxes it raises from businesses and households.

Fiscally Responsible With Our Money From the perspective of personal finances,  being fiscally responsible means taking control of our finances. This starts by making sure our spending does not exceed what we earn.

As parents, we need to convey to our kids how they can handle money by being fiscally responsible, starting at a young age. We also want to share our money blunders so that they can learn that we are not infallible. All of this may sound simplistic, and we will share our tips down below.

As older parents with younger kids, we often benefit from the money mistakes our friends have faced as parents. Like hackers that always find new ways to crack into our vulnerable accounts, our children are often one step ahead when it comes to new ways to order things online.

It seems that kids assert more power and have greater access to spending money than previous generations. They make in-app purchases of gaming subscriptions, skins, virtual currency, and character/team upgrades that go with those games.

How To Teach Your Kids To Become More Fiscally Responsible

Start At A Young Age

Parents can instill good money habits when kids are as young as seven years, if not earlier. They listen more to us, have fewer distractions than in their teens, and see us as their role models. Talk to your kids about money so that they know it is not a taboo topic for them.

Set Up A Budget

You can teach them what a budget is by using saving and spending examples. Write a shopping list and go shopping for a few items with them. Put the change from shopping into a clear jar for saving money.

Encourage Them To Save Money

Teach them how to postpone impulsive buys to save for bigger items in the future such as a bicycle, car, or college. Show them how you buy things that are on sale. Explain how you make choices based on priorities for your household. This lesson can help them to make their own preferences.

The Magic of Compounding

Using pennies or toys, you can teach younger kids about the benefits of saving and compounding interest.  When my son, Tyler was in kindergarten or first grade, he brought home a book, One Grain of Rice: A Mathematical Folktale by Demi.

Talk to your kids about money, specific to credit card use, its benefits, and detriments. Explain how to use credit cards for convenience, build a credit history, and keep balances to manageable levels to pay them off.