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Teach Your Children About Money

I firmly believe that if we'd been taught more about investing

and basic money management in high school (and younger!) my

generation wouldn't have some of the financial troubles that

they do. I was lucky enough to have parents who taught me those

lessons at home, but many of my friends weren't so lucky. I

don't think much has changed for our own children. The schools

just don't have the time or resources to focus on basic money

skills so it's up to us as parents to educate our children. We

have to teach by example. If our children see us spending money

on credit cards they think that the little plastic card is all

you need to get your heart's desire. We need to show them that

the little plastic card produces a bill each month that must be

paid. Pay it in full so they can learn the habit early.

Some people are hesitant (or refuse) to involve their children

in their financial affairs. Up to a certain age I would agree.

But at some point you need to involve your children at least a

little bit so they can learn the process of money management and

it will help keep you accountable for your actions. Having to

explain your frivolous purchases to your children can quickly

alter your own habits.

Your ultimate goal is for your children to be better off than

you are. If you don't teach them about how to manage money they

could easily become worse off in their adult years. Don't burden

them with ignorance. If you don't feel qualified to show them

proper money handling skills then enlist the help of qualified

professionals or family members who are skilled with money. The

goal is not perfection. It's basic education and hopefully

preventing the already catastrophic credit card debt from

spilling over into the next generation.

My favorite example of teaching money management within the home

was setup by the Dilley family. They had sextuplets several

years ago and learned a way to teach their children good

behavior and money management at the same time. The kids earn

Dilley Dollars for doing their chores and good behavior. The

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dollars are redeemable for video game time or can be converted

to real money (50 cents real money for every Dilley Dollar)

which can spent on real things. The kids are taught to save some

of it and they learn to appreciate what it takes to make money

in this world.

Whatever system you come up with, stick with it. Make your

children accountable for their own spending habits and be

accountable to them for your decisions. Admit your mistakes and

do your best to lead them down the right financial path. Stick

with the consequences of poor judgment. Of course you are the

parent and make the final decisions, but the more you can

involve them in the money processes of your household the better

off they'll be when they step into the real world on their own.

About the author:

Heather Peters is a self proclaimed financial fanatic with lots

of information to share. To learn more about how to teach your children about money visit the

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