Children and Money Management

I hate to be the bearer of bad news but, if your children think that money grows on trees, it's your own fault. Oh sure, the media bombards us, and our children, with enticing commercials and ads with the "must-have" latest and greatest clothes, shoes, toys and gadgets. The question remains, Who is responsible for allowing little Johnny, Sasha or Emilio to have everything their little hearts desire? The parents. In this increasingly materialistic society in which we live, teaching our children an appropriate and healthy attitude towards money and money management will have long-lasting affects, long after they have grown and moved out. Children learn from their parents first and foremost, so how can you teach your children the value of the "almighty dollar", and instill in your children wise decisions in regards to earning, saving and managing money?

The Earlier The Better-parents should begin teaching their children about money, and where money comes from, as soon as their children can comprehend what a dollar is, and how it can be spent. Children often imagine that money just pops out of a machine like magic, by pushing a few buttons or, "Mommy, just write a check, the bank will give you the money". Very young children can begin understanding the value and importance of savings, with the help of a savings bank, or "Piggy Bank". Not only do they learn that saving money takes time, but they also learn that it takes a very short time to spend it all.

The "LearningCents Bank" is a clever, fun and educational savings bank that teaches children how to manage their money. The bank has three separate compartments, one for "Saving", one for "Spending", and one for "Giving". I personally prefer this over the conventional "piggy banks" because it has three compartments instead of just one. The spending and giving compartments are easily opened by the hinged lids, while the savings compartment can only be opened from the bottom, hidden from sight. The attractive plastic bank comes with alphabet stickers and a dry-erase marker for personalization, keeping track of how much money has been put in the bank, and comes in colors that children will enjoy.

The Value Of Earning Their Own Money-finding ways for your children to earn money, rather than simply being "The First National Bank Of Mom And Dad", teaches children greater appreciation for the things they choose to spend their money on, and greatly increases the chances that they will take better care of their purchases. Consider the numbers of young teens who have reached the magical age of sixteen, and are immediately "surprised" with their own, brand spanking new, sports car. Within a short period of time, due to the sheer excitement of cruising around with friends in the new wheels, lack of driving skills and road experience or various other distractions, the car gets totaled and Junior or Missy is off and running once again in yet another brand new car.

When my teenage children were growing up, they would often come to me saying they "needed" Michael Jordan tennis shoes. If it wasn't name-brand shoes they were after, it was the latest clothing fads with designer names and equally designer price tags. I never gave in to their so-called "needs", and when they were older, making their own money from their jobs, they quickly realized they could buy more "stuff" by carefully choosing which stores they would frequent. By doing so, they take much better care of their belongings because they know how hard they worked in order to buy them.

When each of my children reached the ripe old age of sixteen, they not only did NOT immediately receive their driver's licenses, but they also did not receive a car in the driveway. Before my teenage children were able to get their driver's licenses, they not only had to complete the required Driver's Ed classes the school sponsored, but they also had to complete (with high marks) the Driving School Of Mom And Dad.

Setting The Right Example-children learn most by example, and they watch everything you say and do. If you are consistently racking up charge card bills, buying up the latest and greatest gadgets at whim, how do you expect your children to do different? Setting up a budget and sticking to it, shows your children that you have the discipline to tell yourself "no", rather than presenting the idea of "do as I say, not as I do".

Consider having your children watch you pay your bills. Carefully explain that you only have "x" amount of money each month to cover necessary expenses such as groceries, rent or mortgage, utilities, gas for the car etc. Explain that aside from paying bills each month, that you also put money into savings, just as you have your children do. Once those responsibilities are taken care of, monies left behind are available for various expenditures such as vacations, family outings, going to the movies or the zoo.

Over-Indulgence-one of the biggest mistakes parents make is when children are given too much. By doing so, children learn that parents pockets are bottomless pits. Learning that you cannot have everything you want is a vital part of raising children to become independent, successful adults. Parents must be firm and consistent, unwavering to the demands and tantrums children and teens often use to get their own way. Just because the neighbor kids or school friends have the newest name-brand clothes or shoes, doesn't mean you should break the bank to "keep up with the Jones' family". Even if the money is available, children need to learn that money is not always there for selfish, self-indulgence. It's an opportunity for you to teach your child what you believe is important, what is not, and why.

I cringe every time I see a teenager with their own credit card. Some teenagers I know personally are given credit cards, not the ones with limits that the parents carefully gauge, but credit cards that these teenagers use at whim, buying and buying and Mom and Dad pay the bill. I want to shake these parents back to their senses, but I know they will learn a very hard lesson from this, sooner or later. These teenagers do not have jobs to teach them about money and the value of hard work, saving their hard-earned money for the things they need and want. They are simply catered to, receiving everything they ask for, regardless of whether the parents can actually afford it or not. No wonder we have a society of teenagers and young adults who are lazy, unmotivated, with an attitude of "it's all about me".