Educating Children About Money

Our child's education about money should begin at home.

As parents, we are responsible to teach them how to be financially savvy, and it is best to start when they are young.

I hear a lot of parents complaining that their children are lazy and have a sense of entitlement. Perhaps we are training them to be that way. So how do we train them otherwise?

What kind of an example are we for our children? Do they ever actually see us with money (cash), or do we whip out the credit cards for everything from gas, groceries and other essentials, to big ticket items like televisions or computers?

Perhaps they have the sense that there is an endless supply of currency behind those magic plastic cards.

Children are like sponges. They soak in what they see on television, what their friends say, and observe how their parents behave. Does our financial responsibility shine through, or do we give our children the idea that we can get anything we want - when we want it? Are we trying to outdo the neighbors, or do we use constraint when the latest tech invention is mentioned.

Here are a few suggestions that may help our children learn about money:

Give them responsibility

Make them earn their games and gadgets. Give them chores and make them help take care of the home and yard. This will influence them to take better care of what they have. If they fail to do their part, there should also be consequences. We should not reward them for not doing their part.

Give them an allowance

When I was young, my parents would have me do simple chores like dusting, taking out the garbage, sweeping, etc. Then in return, they gave me a weekly allowance. It helped me to learn the value of work. Then I was given the option of saving it or spending it on something I needed or wanted.

Start small and give them a little raise as their work improves

By learning what can be purchased with a few pennies or dollars, children will realize the real value of money. They will soon realize that it will take many weeks of doing chores to buy a game or a bicycle.

Advise them to save some of their money

It is difficult to save when you actually have money burning a whole in your pocket, but children can learn that instant gratification is not as sweet as saving up for something that is more worthwhile.

Create one jar for saving and one jar for immediate spending. We could even go further and create another jar for helping others. This will help build their character as they try to look for others that they could serve by giving them a few cents or dollars.

Show them a Budget

Jars are great for younger children, but as they grow, we could teach them about budgeting. Sitting down with our family and giving them visuals of where the money in the family comes from and what bills it has to pay each month is helpful. They will no doubt be surprised with all the incidentals that we are obliged to pay every month that they never even thought about.

The more children understand about family finances, the more children are likely to appreciate their parents hard work. They may even take more responsibility for the clothes, toys, bikes, and accommodations that are provided for them. We need not give them the exact amounts of money we make or exact cost of our utilities, but give them an idea of where the money comes from and where it goes each month, just to keep a home running.

Teach them about Credit

Today it is difficult to do any thing financially without good credit. We should teach our children that bills must be paid on time, otherwise we end up paying much more for the things that we purchase.

Help them Grow Up Financially

Give children a time line of when we want them to be financially viable. Many teens think their parents will go on supporting them no matter what they do with their lives. They just need to know that this is not acceptable behavior.

Teach children the value of an education. They can make their own choices, but help them realize the consequences of their decisions in life. Do not nag, lecture or cajole. We can simply explain in terms that they will understand.

We all want what is best for our children. Sometimes it is hard to see them learn the important lessons in life. They try, they fail, they get back up, but they do learn from experiences. We shouldn't be to swift to bail them out for every wrong decision they make. We can teach our children how they can work through difficulties, face up to their own problems, and take pride in their own accomplishments.

Teach Children Ownership

In this world of instant gratification, it is important to teach our children the discipline of working for and paying for their own needs and wants. Teach them ownership of their toys, money, goals, grades, choices, bodies and conflicts. This will foster responsibility and displace entitlement.