31 Days Towards Financial Freedom ~ Day 23 *START YOUNG*

Tuesday, October 25, 2011

One of the most important things you can give your child (even above the hefty college funding) is to teach him or her the proper way to handle finances. 

This is especially important in today's society where kids are inundated with credit cards and instant gratification everywhere they turn.


There needs to be some sort of foundation and training that they can come back to so that they don't fall into those bad habits.  It is just like anything - you are either going to let society train them or you can teach them some foundational principles and hope that they will make the right decisions in the future.

I believe that it is important to allow your children the opportunity to understand some of the real reasons that you are not going out to dinner tonight or that attending a soccer camp will require some extra funds or some cuts somewhere.  I don't believe that they need to know the ins and outs of your family budget and struggles (they need to feel the security that they are taken care of) but I do think it is important that they realize there are sacrifices and hard work that go into the perks in life.  If a sport or activity does need to get cut because of the budget, it should be explained as to why.  Don't make up excuses, your children deserve to know.
I know I certainly don't want our girls to grow up with the entitlement attitude!

I think it is wonderful to give your children an allowance (we have already started Charlee at $1 a week now that she is 4).  We do not tell her what she can and cannot spend her money on.  If she wants to blow her $1 on candy that day, so be it!  But she will soon realize that if she wants the bigger items that she needs to save.  She is very proud of herself when she saves her money.  She even told me the other day when she saw a Christmas animal she wanted at Home Depot that she was going to save her money until Christmas to buy it :-))  We do not say that she doesn't get an allowance for not doing her chores, but we do tell her that if she doesn't do her chores then we will have to take a portion of her money to pay her sister, dad, etc.  to do the chore for her.  This works every time!

For Heaven's sake please don't buy your child the nicest car as soon as they turn 16 and the designer shoes right when they come out, even if you can afford it!  Many parents mean the best and they don't want their children to struggle.  They have worked hard and enjoy spoiling their kids rotten  giving their children the latest and greatest things.  A child/young adult doesn't learn anything from getting everything they ask for.  They learn from their hard work paying off.

Now, I completely believe you can go too extreme on this.  They are still children after all and are going to school, involved in sports and so on.  They obviously should not be paying rent, doing the grocery shopping, or paying you for gas (except maybe in their own vehicle).  Find what works for you and your children...maybe you pitch in $2 for every dollar they earn towards a new car, you pay for gas - they pay for insurance (may reduce the number of speeding tickets ;-)), you buy the prom dress - she pays for getting her nails done, if he gets at least 3 A's you take him out to buy the new pair of Nikes...

If there is no awareness early on of what things cost, where the money goes, how to budget, etc. it is much harder to learn when you graduate college and the creditors are handing out free credit cards on the college campus.  It's like trying to learn Chinese after you moved there instead of knowing the basics before you go.

Any tips or tricks you have about teaching your kids?


Kelli @ The Loss Cause said...

Great post! When Morgan is at all interested in money we are going to start her on a commission program where she earns a certain amount of money for each chore.

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