From the time our children are beginning to crawl we start teaching them about right and wrong, personal safety issues and morals. Through the years we warn them about stranger-danger, alcohol and drugs. We try to set good examples for healthy eating and personal accountability. Why do so many parents neglect to teach their children one of the most important survival skills they’re going to need – how to take care of themselves financially?
We certainly teach our kids about spending money, but this is setting them up for future failure. Kids are constantly exposed to the emphasis on buying power but this comes at the expense of other important money skills that kids need to learn – earning, saving and sharing.
Money In Action
Parents have to talk to their kids about money from a very early age as this is when good habits start to form. It’s important for kids to come into contact with money, learn where it comes from and understand how it is used. Encourage your kids to play “store” at home. Let them put coins in the parking meter. Let them swipe the credit card when you get groceries. Bring them to work with you. Bring them to the bank to open a savings account.
I believe in allowances for kids who are ready to start doing age-appropriate things around the house, like watering the plants or setting the table. It is important to use the allowance as a teaching tool. It’s never too soon to start teaching financial responsibility. Even kids as young as 5 can benefit from the idea of budgeting – the child should set some allowance money aside to spend, some to save, some to share with the community.
This helps kids make better decisions and learn to delay gratification. The time spend deciding what to buy with their own money, what to save for and what causes to contribute to also builds character. Another benefit is valuable quality time with mom and dad.
Talk to your kids about money and keep talking to them about it as they grow. The lessons learned will stay with them for life.