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Teaching Children Financial Responsibility - 6 Tips
Children need to learn financial responsibility because we live in a money centered society. Without this skill your children will flounder. Financial irresponsibility affects most areas of our lives from marriage to buying a home. Here are some ideas to help you.
1. Set a good example. Children are very aware of what is going on around them and they will start questioning some of your actions. Take using a credit card for example. When I fill up sometimes my little children will ask me why I use a credit card if they are bad. I have to chuckle at how intuitive they are. But this gives me an opportunity to explain to them the proper use of a credit card.
2. Start while kids are young. We have a tendency to put things off with our children partly because we feel they are too young. With money, you can start teaching your children when they are between 3 and 4 years of age.
3. Set a budget. Budgeting is a very useful tool for any family. Many children think there is a "money store" where you go to get money and there is an unlimited supply. When teaching your children about money you can talk about the family budget and how it helps you control how you spend money.
4. Delayed gratification. Because of credit cards many people do not learn that they need to save up for things. Like children we want what we see. Use this as an opportunity to teach your children how they can work for what they want. You can help them save their money as they earn it and you can even match it if you want to. I find this gives my children a big incentive if dad is willing to match what they earn.
5. Comparison shopping. When you take your children shopping it is probably a trial for you. Something I have done is I tell my children to find me the best price on certain items. You can even get them little hand held calculators and teach them how to figure prices based on ounces. You will be surprised how this will turn your shopping experience around.
6. Financial markets. Your children hear comments about the financial markets everyday and may even be asking you questions. This is the best time to start teaching them. Get some books from the library and rent movies like "Wallstreet" and "Trading Places" (Does contain nudity and language so get an edited version). You can watch the news with them and take time to explain to them the meaning behind the financial news. Very good stuff.
Teaching children financial responsibility will pay huge dividends down the road. There are many benefits for you also because your children will become more appreciative of you because of all you do for them. Tell your children that it costs between $100,000 and $150,000 to raise a child to the age of 18. Help your children by delaying immediate gratification and setting a good example. Educating them about the stock market is an excellent way to teach them also.
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