If you’re not teaching your kids about money, they will learn it from others. It is your responsibility as a parent to pass along your family’s values on handling money. Don’t panic if your children are already teenagers. Don’t think you need a degree in finance. Start now, where you are and where they are. It is okay to admit that you have made mistakes with money.
Start by teaching children where money comes from. Money does not grow on trees! When my children were small, they thought I could just visit the ATM and get more money whenever I wanted. Children need to learn that money comes from work. If your children are young, start by assigning them a few age-appropriate chores. At this point you are looking for effort, not perfection. If they complete the chore, they get paid. If they don’t do the chore, they don’t get paid. Isn’t that how it is at your job? Older children can earn money by babysitting, mowing lawns, walking dogs or at a part time job. Studies show that students who work while going to school actually have higher grade point averages.
Basically you need to teach your children that there are three things you can do with money. These are: give, save, and spend. Teach them to do these three things with any money they receive for work or as gifts.
Some children are natural givers. Let them decide who or where they want to give. That may be a place of worship, a local charity, a classmate or a homeless person. It will mean more to a child to give something that they earned.
The next thing that children need to learn is how to save. Again, start small with a young child. Is there a toy or game they want? Show them how to save a portion of everything they make in order to buy something they want. For older children, have them save toward their first car. To reinforce what you are trying to teach, you may want to match what the child saves.
Children should also be allowed to spend some of the money that they have earned. When children have to spend money that they earned, you will discover if they really want that item. Decide in advance what items that older children will be responsible for out of their earnings. Perhaps if teens want designer clothes or the latest electronic gadget, the parent provides the amount of basic necessities and the teen is responsible for additional amounts for the item they want.
You can do this!
By: Katrina Harder, CPA, Centra Finance Specialist
More about Katrina: I live in the suburbs of Gnaw Bone, Indiana and am the single mother of 3 and the grandmother of 5. I completed my degree in Accounting attending school part time while working full time. I enjoy sewing, reading and the Cincinnati Reds!