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How To Teach Your Kids To Be Responsible With Money

Jul 19, 2008
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.

Kids need to learn that, while money is essential to life, it can't buy happiness. And it doesn't grow on any trees either. It is important for children to understand that the family's needs such as water, electricity, food, and a home are paid for with the money that their parents earn. If Mom and Dad don't work, there simply will not be money available for such necessities.

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.

Children can learn how disciplining yourself financially will eventually bring worthwhile rewards. You can accomplish this with your kids by saving money each month to be used by the family to go out and do something special and fun that the kids have picked out.

Disastrous results are sure to come from allowing children to learn about the use of money themselves instead of from their parents. If they receive money but have never learned how to use it wisely, it's sure to disappear without anything to show for it. When parents do not provide their kids with financial advice, they will no doubt find it with their financially irresponsible friends.

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.

Financially responsible adults were once financially responsible children. Start teaching your kids about the importance of handling money wisely as early as possible.
About the Author
Does the credit card company you deal with use two cycle billing? If you aren't sure, you could be losing even more money than you think if you don't pay off your credit card every month. Find out what two cycle billing is and why it's so bad on the Debt Smackdown website at http://www.debtsmackdown.com
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