Many adults today are not financially responsible. They don’t know how to budget for their expenses and often don’t have any savings at all. They live week to week, spending every cent they have and using that convenient plastic card when they run out of money.
- If you have grown up in a home where everything is charged and your parents are up to their eyeballs in debt, it’s unlikely that you will be able to responsibly handle your money.
- If you have grown up in a home where you have been given everything you want, you won’t feel any responsibility for the money you earn and will expect to have whatever your little heart desires.
It is important to teach your children how to spend and save money efficiently so they will become responsible adults. The world pressures us to spend more than we earn by using credit whenever possible and we need to learn how make good decisions so we don’t end up with mountains of debt.
Here are some ideas to help your children learn the value of money:
- Set a good example by using cash when you buy things. Your children will imitate what you do and if you use credit cards, they will do the same thing and think it is okay. Remember, it is way to easy to slap down plastic and not think about making those payments later.
- Give them an allowance based on their age and what jobs you expect them to do in return. If the jobs are done, they don’t get their allowance. When kids are paid to do work, they learn the value of working and getting paid. However, some family chores should not receive monetary payment (making bed, picking up toys, doing dishes) but should receive payment in praise for helping and being part of the family. Paid work could include cleaning the basement, vacuuming, taking out the garbage and cutting grass.
- Guide them as to how they should spend their money. Teach them the difference between wants and needs. It is so easy to spend money on things we want but don’t need. Encourage them to save some and also donate to a church/charity. A reasonable percentage might be saving 20-30%, giving 10% and spending the rest.
- Open a bank account for their savings and as they get older add a chequing account so they will be ready to pay for item they need or a small monthly bill like a cell phone.
- Let your child shop for their own items. A small child might be given $5 to buy toys or snacks – this could buy a couple of small items or 1 larger item. A teen might be given $100 to spend on clothing – this could buy 1 sweater at an expensive store or several items at a discount or second-hand store.
- An older teenager should be encouraged to get a part-time job and save money towards their future.
- Talk to your children about the dangers of having credit cards and how easy it is to get deeply into debt. Encourage them to pay cash when possible. Teach them how to say ‘no’ to pushy salesmen and to think carefully when spending money, to avoid buying things they don’t need.
If you don’t teach your children how to manage their money, they will likely end up being pressured into buying things they don’t need and end up deep in debt.