Think about when you were a kid and what you learned about money. Combining your development at home and what you learned in school, do you think that you knew enough entering adulthood to be financially responsible? Most people I think would say no, and so parents need to take a bigger responsibility about teaching their kids how money works in this world. Educators also need to take a bigger responsibility, and personal finance needs to become a bigger part of the general education curriculum in public schools.
Parents Need To Teach Kids How To Handle Money Responsibly
1. Teach your child the value of money.
One thing parents fall short in teaching their kids is saving. Saving isn’t just saving money from an allowance that had nothing to do with work performed. Do you make your kids work for an allowance? Do you teach them the value of a dollar? Kids need to learn this very important lesson early on so that they realize the importance of budgeting, saving and living within their means.
2. Practice what you preach.
Parents also need to lead by example. If parents are abusing credit, not living according to a budget, buying children everything they want and more, then children are going to learn to do the same. Parents want to have a positive impact on their children in as many ways possible. Yes, you love your child, but are you teaching him or her everything they need to know about managing personal finances?
3. Do not confuse them.
Parents teach kids all kinds of money mistakes without even thinking twice about doing so. Are you dragging your kid into the office of a payday loan company to make your payment? Are you joking about paying the minimum payment on your credit card in front of your children? That payday loan company jab is a big one because kids often tag along to different places of business with their parents.
If you’re dragging your kid into a payday loan office or a pawn shop to get money, the child is going to think it is normal to do that. Think about grocery shopping, too. When grocery shopping with your children, do you let them get everything the want just so you can hurry up and get out of the grocery store? Do you look for bargain brands? Do you use a grocery list and stick to a budget? Do you talk to your kids about important grocery shopping tips that they can use later? Do you buy whole foods for ingredients in recipes to cook, or do you buy frozen dinners and hit the drive thru often?
4. Teach your child by example.
Kids are watching every move their parents make, give or take. They learn all kinds of thing about money from the actions of their parents and not just the words. It’s important do discuss money mistakes with kids and instill in them the proper values for managing money responsibly. If you do make a financial mistake, out yourself to your children when applicable so that you can show them what you’ve done wrong. You want them to be financially responsible adults.