It is extremely important that we teach our children the value of money and how to properly handle our finances. As we have become an "I need it now" country, filled with people in debt using credit cards impulsively I see more and more how much we need to train our youth financial responsibility. Can you start too young, probably, but once they start earning an allowance or making money doing odd jobs, they need to start learning. It is much easier to learn early, then to try and correct bad money habits. I should know, because we fell into some of these pitfalls when we first got married.
So I am going to share a few tips and ideas to use to teach your children about finances.
1. Start early teaching them to save money. You can open a children's savings account, or if you want something a little simpler, purchase a bank of some sort.
2. Teach them to work for money. Have certain extra chores that they can do to earn money. When I say extra, they should have a certain amount of chores they do without pay, just because they are part of the family and we all do chores around the home. Perhaps you could put up a chore chart with paying jobs.
3. Teach them about giving to others. Whether it is donating toys to other children around the holidays, giving to a mission or church, you could even help them find an individual they actually know that they can help.
4. Help them learn to look for ways to earn money for larger purchases, like a bike. Depending on their age, they can pull weeds, mow lawns, babysit, walk dogs, rake leaves, help around someone's home with cleaning, painting a fence, etc.
5. Once they are a little older, teach them how to create a budget, fill out checks, apply for a job. Yes, I have seen people unable to do this because they were never shown how.
6. Have them write down exactly what they spend, every cent for a week, or even longer. At the end of the time period you set up, sit down and help them see if there is somewhere they are either spending foolishly or where they could cut corners a little to save. Money Savvy has a book, Cash Cache, that helps teach teens financial skills.
7. Have them start a change jar where they put all their change to save it up. My children have been amazed by how much change they have at the end of a month when they go to a bank and turn it in.
8. Teach them to wait and plan for purchases that are out of their reach. Many times they will appreciate something more if they worked to earn it rather than just have it handed to them because they want it.
By teaching them how to handle their funds, they may never end up in debt and in need of a company like Strategic Financial Solutions. These companies are out there to help should you run into financial difficulties, but how much better to never need them.
I really hope this post helps someone to think about teaching their child about handling finances. Some of the ideas in this post will also work for adults.