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Teaching Your Kids Responsible Money Management
It's never too early to learn about money. Money makes the world go around. We need money to live our lives in today's society. Kids who learn about money matters at an early age develop a healthy respect for handling it. Here are some usuful tips on how to teach kids money responsibility:
Parents are the first teachers for their kids. Don't wait until the unit about money comes up in the third grade math class. Teaching the importance of money starts at home between parent and child.
Money doesn't buy happiness, but it does keep one from starving. Mom and Dad have jobs that pay for the house, the food, the utilities, and everything a family needs. Kids need to know that their parents are not like money trees that you can shake until enough green falls down for a new bike or a new doll. There is only money to spend as long as the parents go to work and earn it.
Kids can start with their birthday and holiday money. Instead of spending it right away, show them how to save the money until there is more to add to it. Once they have saved enough, they can buy something that they want instead of settling for buying something with the little money they have received at that moment.
It is not enough to know that money exists. Kids must be able to handle it responsibly. Create a family budget and let the kids participate in the process. They will see how their parents divide their money between the bills and leisure activities.
Ask each child what they want to do for a special event each month. Setting up a fund for this purpose ensures that there will be money available to finance your ventures. Kids learn that instant gratification is not the only way to be happy. Using money the right way becomes a reward for discipline.
Not teaching kids about money can lead to a disaster. Without proper advice, they could turn to friends who may not be money savvy at all. Acquiring money without a plan for how to keep it results in a lot of money slipping through the cracks.
Kids that can't manage their own money will expect Mom and Dad to do it for them. Whenever they get in a financial bind, they will call their parents to bail them out. Parents don't want kids to suffer through unpleasant situations, but kids won't learn important life lessons when not held accountable for their actions. Teaching this once the bad habits have been formed will be harder than you think.
Responsible money management doesn't happen as an adult. It begins in childhood with that first birthday five dollar bill. Don't wait; talk to them now about money. It matters.
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