Kids are taught about sharing, safety, acceptable behavior, physical health and safety, and good study and work habits but seldom are they taught about money. These will be things that they take with them forever, after they grow up and move out on their own. Money is an important factor in life and it should be addressed in some manor so kids at least know the basics such as budgeting and saving.
Involve your children in family finances. Let them know how much you make or give them a comparison so they can better understand how much it is. Tell them how much each month money is spent on expenses, and what goes to savings, etc. If you are saving a lot your kids may try to as well, while if you are disorganized and spending without knowing how much you have available your kids may follow in that trend as well. How you spend your money will show your kids how much you have or don’t have to spend.
If you use credit cards, as soon as the bill comes in, pay it off and let your children know what you are doing. This way they will understand the use of credit but see that it gets paid off as soon as possible to prevent any financial problems in the future. Teach them the difference between debit and credit cards. Show them your online account with your bank or your bank repository booklet where you keep track of all incoming and outgoing money.
Then let your children manage their own funds. If you give them an allowance, let them do what they want with it. If they come to you asking for more money or something in particular they want, tell them to save their allowance so they can buy it. This will teach them to save and not be expected to get everything in life for free. If they have a part time job, it may be practical to set up a bank account with a savings so they can put this money there and earn interest. Teach them about comparison-shopping. What they may find in one store may be less expensive in another. If they get into a financial dilemma and they need your help, make sure you make them pay you back or else they may take advantage of the situation again.
If your children know the basics of financial management they will have a better grasp on life once they enter the real world on their own.
Article by Kelly Kennedy