Here is a post that was previously posted back in March of 2005. If you haven’t reviewed the ELYM archives, you may want to take a peek.
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As you’ve read through all of these articles, have you found yourself thinking that you should have done a few things different? Could you be better off now if you had made different decisions earlier on? Do you over spend every month? Do you under-invest every month? Whether you do or not, you need to think about what your children are learning from you. The old, “Do as I say, not as I do” doesn’t apply here. Your kids watch how you manage the household. If you are always scraping by, they notice. If you are always trying to buy the latest and greatest, they notice. If you have arguments with your spouse, they notice. If you get calls from bill collectors, they notice. They continually both consciously, and subconsciously pick up all of your traits. Besides the fact that you need to invest and plan for your future, your kids are a very big reason to start making positive financial decisions.
I think that one of the greatest gifts that we can give our children is knowledge. They’ll pick up their ABC’s in school. They’ll learn algebra, chemistry, English, and a bunch of other subjects during their school years but they won’t learn money management. No one is teaching your children to be good with money. The responsibility falls on your shoulders, and your shoulders alone.
So, you’ve got all of this responsibility. How do you deal with it? You could just plop a book down in front of them and tell them to read up on the subject but I think you’d have VERY limited success with that. Here are some ideas that might help you teach your children money management skills:
-Regardless of how much money you have, make your children earn theirs. Creating chores and jobs around the house is a great way to start teaching them that nothing in life is free. Some chore ideas are:
• Vacuum the house
• Nightly dishes
• Mow the lawn
• Do the laundry
• Clean the garage
• Paint a room
You get the idea. There are lots of tasks that need to be performed in any house, including apartments.
-Talk to family members, especially grandparents, about inviting your children over to complete jobs at their house for money.
-Ask around your neighborhood to see if there are elderly, or other neighbors that may need some help and arrange for your child to help them for pay. The amount of pay isn’t important.
-Consider paying your child to volunteer at a community center or another charity. Again, the amount of pay is not important, but the actual completion of the work is.
These are just a few ideas to get your mind going. The important thing about your child performing jobs for money is that they learn to follow through and complete tasks, no matter how much they don’t want to, and that they begin to learn that nothing in life is free. As your child earns that money, the next step is critical. 50% of all the money they make should be deposited in a bank account. You should not do this for them. It is important that they each go to the bank, fill out the deposit slip and talk to the cashier themselves. By doing this, they will begin to learn that saving money is important and fun. Help them set goals. If they have $75 in the bank, set a goal for $100. As saving becomes a habit for them, they’ll learn to strive to meet goals as well and may even put extra money in the bank to reach their goals.
Getting them on track to learn to save isn’t the end of the story. You also need to manage your finances in a similar fashion. As you begin to save more and spend less, consciously point out to your children how great it feels to see the savings pile up. Talk about your long term goals to be financially independent and how your actions today are helping you towards those goals. As I mentioned earlier, your children are continually learning from you. In order for them to really get the story straight, they need to see you practicing what you preach.
