Teaching my kids to be money wise has been important to me since my kids were very little. I was older when I had my first child. I saw the effects that some of my friends created in their kids by giving them tons of stuff without having to earn it.
I decided on a few ideas to teach my kids regarding money. As author Jill Russo Foster says, “teaching teens about money is the key to avoiding debt.”
- My kids never had an allowance. I saw no reason to give them money “just because.” In life, no one is standing on the street corner handing out money to you “just “because.” Well, not unless you are a homeless person; and that wasn’t the goal I had for my kids.
- I always help my kids figure out how to earn money. I have helped my kids get jobs as babysitters, garage cleaners, face painters, stunt performers, video editors and more. I have taught them to be professional in whatever they do. That includes asking for an appropriate exchange in money or service of commensurate value for their time, effort and talents.
- When my kids earn money, some of it is always set aside for taxes, replenishing supplies, savings, and paying commissions (if applicable.) The money they earn is not just shoved into their wallets. Learning to allocate income into accounts (envelopes) for future needs and desires teaches them the invaluable skill of predicting future financial needs and saving for it.
- I taught my kids that any passion or skill they have can be valuable to someone. You just have to find the person who needs what you do. Therefore, do what you love. Figure out how to make it viable and you can pay your way in life doing what you want to do.
- Although I made sure my children got credit cards when they were old enough to have them in their own name, I also taught them to use credit wisely. You need to have at least one credit card because there are certain things, like rental cars, that you can not get without a credit card. In order to start establishing credit, they need to get a card card in their name, then charge some things (that they already have the money for) and pay off the bill when it comes in. We watched a documentary called Maxed Out that is an expose on the credit card industry. This movie graphically shows what happens when people abuse their credit cards. It is an excellent movie to watch with your kids.
- I talk to my kids about money. When the electric bill comes in, I tell them how much it is. We work out how much it costs per day and per hour. How does that compare to wages? What can we do to cut down on our consumption?
- I let them buy their own stuff with cash so that they could physically watch their money leaving their hands. It’s a lot easier to buy something with a plastic card than with actual dollars. This is a great way to keep your kids from buying things that they don’t really need.
Is there some way that you have helped your kids learn to be money wise?
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