Importance of Parents in Pointing Kids in the Right Financial Direction

As a Money Coach I want to emphasize how important it is for parents (and grandparents) to set the right example for kids on how to handle money. It is up to us parents to encourage and to teach our kids proper money habits. Of course, we as parents must first have our own financial house in order. Then we can pass on this knowledge to the kids. Here are some stories:

Alicia, age 20 and saving $500 a month. Alicia has been working since age 13; hard work is nothing new for her. When Alicia was a teenager, her father, as breadwinner, provided food and shelter; she paid for everything else. Alicia babysat and cleaned houses and went to school. "When you only make a little money, you learn how to make that money last." Alicia explains that she learned about rainy days from her father who was once injured and unable to work for almost a year. The family survived from his emergency fund.

Lacey, salon owner and mother of two. "The way you succeed in business is rather straightforward: follow your dream, pay the bills, and have fun." Lacey attributes much of her success in business to her Dad who taught her "everything I know about business and finances." He helped her realize she must be responsible about money. Her parents paid for food and shelter and sometimes for her clothes. She has had a job since 15 and saved $4000 to buy her first car.

Maria enriched the lives of 993 fourth graders during her 32 years as an elementary school teacher. "When I was 12 years old, my sister and I went to a Girl Scout babysitting class. My Mom suggested we learn how to baby-sit so we could take care of younger kids in the neighborhood and earn some extra money. Money was scarce; Mom and Dad scrimped and saved. Mom received a small allowance to run the household; the money was mostly for food and there was only enough for Mom to buy material and make the clothes for us. My sister and I wanted 'real' clothes, things you bought at a store. Thus, our incentive for babysitting was money to buy clothes."

Leah, the loan lady. " Starting to work at the age of 13 and buying my own clothes and school supplies I learned how to budget and save. Then when I entered the finance industry I saw how things are done both right and wrong. I don't think I am like the average young 20 something though. And I don't recommend most people purchase a home that young. I probably wouldn't have done it if I could go back in time."

Money Coach, my own story. "When I was thinking about my first job at KFC as a sophomore in high school, it occurred to me that as a teen I never woke up one morning and said I had better get a job and start saving for my life ahead. My Mom got me the job, and because I was a good kid, I went to work just like she told me to. I want to say 'thanks, Mom' for getting my work life started."

Two things stand out. First, many financially successful people started working at an early age, mostly because they had to earn money in order to buy stuff they needed. Second, Mom and Dad played a key role in that critical first job. In both cases the home environment encouraged work and sound financial habits.

Other articles by this contributor:

Simple Ideas that Will Improve Your Finances

Investment Fees - You Had Better Watch Out

Four Things that Will Matter in 2011