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Teaching Children Financial Responsibility and Ways to Save MoneyAll parents want the best for their children. They want to give them everything they never had growing up. Actually, most parents make it a goal to provide a higher standard of living than their parents gave them. Many put this into practice by sending the children to high-quality, often private, schools; dressing them in designer clothes; and providing the newest electronic devices. What many parents forget that one of the greatest gifts they pass along to their children is the gift of education. Financial education, that is. This is similar to the old adage: "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime." Here’s the credit counseling service twist on it: "Give a child the latest iPod and it will be appreciated for a few months until the newer version is released. Teach a child how to work hard and appreciate the value of money and he will be able to afford many iPods in the future." Many people begin to learn the value of money when they have their first job. They experience all the work that goes into earning that first paycheck and may be a little less eager to spend it. However, it is possible to begin learning these lessons a little earlier in life. While they may be too young to learn the hazards of bad credit, this is the perfect time to introduce them to debt free living and teach them ways to save money. The most popular teaching method is to give a child an allowance. Why is this such a popular approach? Receiving an income gives them the experience of managing their own money. Granted, they will make mistakes. But it is better they make these mistakes when the consequences are minimal. Children will also learn about how much items cost and the fact that money is limited. This should help form their decision making skills and give them greater appreciation for items that they bought with their own money. Other parents may assign household tasks to children and give an allowance completely unrelated to chores. This method reinforces the idea of personal responsibility. For example, they will know that when they grow up they will not get paid to dust, take out the garbage, unload the dishwasher, etc. However, if they do not complete the assigned tasks, they will still receive weekly money. This may reinforce some bad habits, especially during the rebellious teenage years. Perhaps they will be less apt do their chores if they didn’t anticipate needing their allowance that week. Tips:
The greatest way to teach your children financial responsibility is to be an example. Whether they admit it or not, children look up to their parents and will tend to mimic their lifestyle. Don’t allow yourself to fall into the trap of bad credit. Take time out during a trip to the grocery store to point out ways to save money. You can do this by using coupons or showing them how the prices differ from brand to brand. By being an example of debt free living, you are showing them how to be a good steward with what you’ve been given. |
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