Monday, January 26, 2009
Unfortunately, it's all too easy to raise financially irresponsible children. The danger: Your kids will grow up to be financially reckless, and you will feel compelled to bail them out. Don't want to spend the rest of your life footing their bills? Then teach your children about saving money.
It is important to give youngsters financial responsibility. You can start with a toy-and-candy allowance when they are five or six years old and then, once they are teenagers, you can step it up with a clothing allowance and a bank account. The goal: to get your kids to make tough financial decisions. If they are always asking you for money or they are merrily racking up charges on the credit card you gave them, their desires will be limitless and spending will seem painless, because they aren't paying -- you are.
What to do? You have to set up a system where, instead of you saying "no," your kids have to say "no" to themselves. The goal: to get your kids to make tough financial decisions. The most important financial skill your child can learn is the ability to delay gratification.
As adults, we have to properly teach our children about earning money, good spending habits, and saving habits. A child is never too young to learn. I have a 3 year old grand daughter who is currently being taught the value of a dollar. Her mother has developed a technique that excites her child about earning money.
My grand daughter works for pay. She is paid 25 cents everyday for completing the following chores. She makes her bed, brushes her teeth, puts away her toys, complete her studies, and helps mommy with the dishes. She is given a star each day for successfully completing her chores along with her 25 cents. Every day she gleefully places the star on the calendar and puts away her money in her purse.
At 3 years old, my grand daughter does not want to spend all of her money at one time. When she goes to the store, she chooses to buy only 1 item so that she will have some money left. Her mother teaches her the different coins and practices using them when they play with her kitchen set. When she pretends with her shopping cart, she buys her pretend eggs, milk, etc. with real money.
No matter how poor you are, you can always teach your child about earning money. The child readily adapts to working for pay and finds creative ways to save. My grand daughter does not walk over pennies. Now when she sees a penny on the ground, she announces she has found money and gladly adds it to her stash. She understands how valuable money is when you go to the store.