Lessons for Parents on Children and Money

As our children grow, we teach them about topics such as sharing, acceptable behavior, proper hygiene, and safety – even good work and study habits. But seldom do we teach them about money. All of the things we teach our children are things that they take with them after they’ve grown up and move out on their own. Money is such an important factor in life that it should be addressed in some manor so that children at least know the basics of things such as budgeting and saving.

Though some people protest such an action, involve your children in the family finances. Let them know how much you make each pay period, or give them a comparison so they can better understand how much it is. You should point out how much money is spent on expenses each month, and how much goes into savings and other accounts. If you children notice that you are saving a lot, your children may try to do that as well. However, if you find that you are disorganized and spend without knowing how much you have available, your kids tend to follow in that trend as well. Seeing how you spend or save your money will show your children how much you have or don’t have to spend.

If you use credit cards, you should pay it off as soon as the bill comes in and let your children see what it is that you’re doing. Doing this will let your children understand the use of credit, but will let them see that it should be paid off as soon as possible in order to prevent future financial problems. They should learn the difference between debit and credit cards. If you use online banking, you should show them your online banking account (your check register and bank statement if you don’t) to show them how you keep track of all incoming and outgoing money.

If you give your children an allowance, allow them to manage their own funds. Let them do what they want with the money. If they come to you asking for money, tell them to save their allowance so they can buy it. This will teach them to save their funds and not expect to get everything in life for free. If they have a part-time job, it might be practical to set up a savings account so that they can put their money there to earn interest.

Teaching your children about comparison-shopping is also important. Teach them that what they may find in one store may be less expensive at another. In the case of a financial dilemma, help them out, but make sure that you make them pay you back. Otherwise, they may take advantage of such a situation again. You may find yourself in a neverending cycle.

Once your children have a basic understanding about financial management, you just might find that they will have a better grasp on life once they enter the real world on their own for the first time.