Teaching kids about money is absolutely a necessity for any responsible parent. Several polls indicate that between 60-80% of adults were not taught about the wise handling of money by their parents. Even sadder, many children have been taught nothing.
Do your children know that money must be earned through hard work? Do they understand that when you charge something, you still have to pay for it? Do they know about budgeting? Can your older children balance a checkbook? Have they learned about online banking? Have you opened a savings account for them and taught them to save?
If the answer to these questions is “no”, do not feel that you have failed. It’s never to late to start teaching your children about money and financial matters. The most important lesson you can teach them is being financially wise yourself.
Make no mistake, if your daughter sees mom spending a thousand dollars on a credit card at the mall, she will want to do the same thing. Set a good example for your children.
First, help them understand where money comes from. There is no “free ride.” Sit your older children down with you while you are making a budget. Explain how you get a paycheck each week, and what bills it goes to.
A huge part of this understanding and teaching kids about money is letting your children work for what they want. Obviously, a parent’s job is to supply for all your children’s needs. However, if your ten-year-old simply HAS to have the latest video game system, and it’s not in your budget, set up a plan for him/her to earn it. This could include saving his allowance, extra chores, or selling lemonade at a yard sale. One thing I can guarantee, because I’ve seen it with my son, kids value things they work for WAY more than things they don’t.
Teaching kids about money involves instructing your child about saving, spending, and giving. When your son or daughter receives money or earns it, have him/her put a percentage into savings, give some to a church or charity of your family’s choosing, and put some aside for spending. This lesson carries over into real life, and your children will remember as adults to set aside money to save, and to give to others who are less fortunate.