140: 7 Ways to Raise Financially Fit Kids

Learn how to raise kids that are financially fit and savvy with money. Interview with Shannon McLay from Financially-blonde.com.

Tweet: Financial literacy begins in the home. @financially-blonde @lindapjones

Here are the 7 steps to raising financially fit kids:

1. Say no. Limit the things you say "yes" to and learn to say "no" more often.

2. When you say "yes", have a budget and constraints. A "yes" is not an unlimited budget. Give them parameters and explain the cost to the family. Let them contribute. Give them a dollar limit to pick out a toy.

3. Use cash to teach your kids about money. Let them count the money and be aware of how much they have. Don't hand over credit cards and debit cards or it will become a mindless swiping activity. They don't have an awareness how much something is worth or how much is left on the card.

4. Allow them to fail. It's ok to let kids experience failure with money. Make it as realistic as possible. Let them use their money even if they spend it all and can't buy something else.

5. Let them be responsible for their wants. Parents are covering their needs, let the kids cover their wants.

6. Teach them to work to earn their money. Show them that specific tasks must done to make money. Use rewards charts with points for chores like making their bed, cleaning their room, doing the dishes, etc. You can also create bonus money they can earn.

7. Allow them to participate in family financial decisions. Money is still a taboo topic in peoples' homes, but kids need to know the decisions you're making as parents. Let the kids see your family budget. Talk with them about charitable giving too.

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Bonus tip: How to get your child to invest! Talk about investing. Let them choose individual stocks. Companies they patronize are a good place to start, ie. Nike and Dunkin' Donuts. Explain how they are part-owner as a shareholder.