Teaching Kids About Money
Teaching Kids About Money
Chances are good that you have full or partial custody of your kids. This means that you play an extremely critical role in their development, and possibly, a larger role than ever before.
If you're like many divorced moms, this might sometimes cause sleepless nights as thoughts of future tasks and responsibilities limit your ability to rest.
Everyone wants their kids to be successful and happy in life. Family counselors hear this all the time. Amazingly, so do financial counselors. Why? Because feelings of self-doubt about one's financial prowess and economic success aren't uncommon. Let's face it, living well (or at least looking like we do) costs a lot and sometimes causes financial mistakes.
As parents, we must respond to every facet of childhood learning, and foster an environment of optimum development for our young. Anything less exposes them to the potential of making some of our mistakes again. Teaching kids about money to improve financial awareness and aptitude is a big deal.
Teaching them prepares them for the challenges ahead and fortunately, also helps us to pick up a few pointers at the same time. Below are a few tips for teaching kids about money:
1. Demonstrate your dedication to effective financial management by devising an overall budget that identifies all expenses and income, sets reasonable spending controls and includes a plan for contributions to savings.
Do this monthly and get the kids involved too. Meet to collectively discuss and establish a plan that includes any expenses that the kids anticipate also. This helps eliminate surprises and teaches them the process of monthly control and review.
2. Discuss money and financial control in goal-oriented terms and always offer kids a chance to participate. For example, when a child asks for something unreasonable that isn't in the budget, point out that buying it might cause your family to become unable to afford something else that the family is looking forward to (that vacation to Disney World that you're all saving for?)
Ask for the child's help in remaining focused on the longer term savings goal. Ask the child to contribute to meeting the family's larger objective by skipping the unreasonable purchase. This almost always works better than just flatly denying it, and it challenges the child to demonstrate commitment to sound financial practices.
3. Involve your child in savings or financial education programs offered by your local bank or savings and loan. As an incentive, many programs provide matching contributions to children who reach a certain savings threshold. See www.aba.com for details on the annual Teach Children To Save program.
4. Reading with children is always a good idea. Reading about money is even better. Here's a link to several good titles.
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