Understanding how finances work should be a lesson we teach our children from a young age. We need to help them prepare for financial success.
Today’s children see their parents pull up to a machine, push a few buttons and money spits out. It is almost an answer to the age old question “do you think money grows on trees?” Well, maybe not trees, but it appears to just pop out of machines.
We need to help children understand what is involved in getting the money into the machine:
· Associating effort with reward
· Connecting value to the dollar
· The importance of saving for both long and short term goals
· The responsibility to give back to others
There are several ways we can help with these lessons, giving an allowance, paying for small jobs around the house or just giving money when asked.
The earlier that our children can develop a work-ethic the more likely they are to be successful as adults. The earlier our children understand the concept that their effort can translate into money which is their money, the earlier they will become financially responsible. There are many strategies that you can put into place that will help your children acquire these skills.
Some parents pay an allowance in exchange for completing weekly chores. Other parents “pay by the job.” These parents find that the process of bargaining with their children for completion of a particular job is an excellent way for them to acquire essential life skills. Taking your children Christmas shopping with a pre-determined goal of how much of their money they will spend in buying gifts and reminding them how much they have left after each purchase is, in reality, an early form of budgeting.
It is never a good idea to simply give your children money to spend whenever they ask for it. It sends the message that money will always be available to them. That is not even true for the very richest people, and it will never be true for your children.
We Can’t Rely on the Schools
It is proven that schools across the country are not placing an emphasis on financial education or planning. In fact only 17 states require financial classes for their high school students. There are a variety of resources, articles and apps available to help you educate your children about money.
Parents Magazine offers 10 Money Lessons Before Your Child Turns 10
Family Education Has 15 Ways to Teach Your Children About Money
Forbes Offers the Top Five Money Lessons to Teach Your Children
Nerd Wallet offers the Best Savings Apps
Bottom line: for the next generation to have a great handle on their money and to achieve financial success we need to start the education at a young age.
Southern Illinois Bankruptcy Attorney law firm Bankruptcy Advocates is located in Carbondale and serves a wide geographic community. The first consultation is always free. Give us a call at 618-549-9800 or email us at [email protected] to speak about your case or legal matter. Convenient appointment times are available.