It’s mind-boggling to think our children learn higher math concepts at school (i.e. Algebra, Geometry), yet fail to learn how to budget or manage their money. This isn’t a post about our school systems, but in this post let’s talk about how to address our children’s needs to learn about money matters they will face daily throughout their life.
When high school students were asked where they spend most of their money, answers were pretty standard: clothes, games, food. What the students failed to notice was that most of these purchases were not purchases that would help them develop a healthy understanding of money.
First, let’s start with the fundamental understanding of money. Explain to your children that money should be cared for, like a pet. If you have a pet, this exercise should be easier. It should not be spent carelessly, and should be given attention. Money should be held but not squeezed to death.
Next, give kids jobs around the house (or the neighbors) but do not give them jobs that are already chores, regardless of payment. Any extra payment that is outside of their chores (such as entering data for you, cutting out coupons for the next door neighbor, baking cookies for the PTA meeting, etc.) could work. Helping them understand that their personal chores are not a means to earning money is crucial in developing responsibility.
Subscribe to financial podcasts, or blogs and have them listen to them as a “class.” Compensate them for putting what they learned into practice. This will not only help them stay motivated, but they can use the earnings to invest into some of the suggestions from these podcasts.
Include them in conversations that you have with people regarding money. Take them to the bank, any seminars that you are attending or discussions you are having with your spouse. Please make sure, however, the discussions with the spouse are discussions and not arguments.
Help open up their bank account right when they become of age. Teach them step-by-step how to look at a bank statement, to write a check, and the numbers to dial or apps to download on their phones to check their account balance.