Teaching your children about money should not be taken lightly. You might not think that you have the skills to teach your children, but who else is going to teach them? Please don’t think that “kids have to be able to make their own mistakes”. Do you let them play in the street so they can “make their own mistakes”? Do you encourage your teens to text and drive so they can “make their own mistakes”?
Your Children are Watching You
Even if you don’t intentionally teach your children about money, you are teaching them, because they are watching you. Every time you pull out your credit card, they are learning to pull out a credit card. When you pay with cash, they are learning that paying with cash is an option. Every time you buy another new vehicle, they are watching. When you give to your church or your favorite charities, your children are learning. When you are having financial arguments with your spouse, your children are learning. No matter how you handle your money, your children are watching and learning.
You need to make sure your actions are what you want your children to learn, but you also need to intentionally teach your children about money and personal finances. At certain times in our lives, some of us are not the best teachers. We don’t know how to teach, and we all know that teaching them takes time that we don’t have. Maybe the lack of time is because conveniences are taking time away from our family. Lucky for us parents, we have them for 20 years or so. This gives us plenty of time to learn how to teach. Young children are sponges when it comes to learning, so start teaching them at an early age.
Start with something simple like counting pennies. Then compare the values of pennies and nickels. These are simple things for your 3-year old to start learning. Have them work running a lemonade stand when they are a little older. Give your children three jars that are labeled Give, Save, and Spend.
Teach Them Giving
Teach them about giving. Talk to them about giving, because there are plenty of opportunities that come up in life where giving can occur. You will need to sit down with your children and teach them that giving to your church and favorite charities is something that is beneficial and something that you do with your money. Every time they receive money, teach them to put some money in the Giving jar.
Teach Them Saving
Teach them about saving. Sit down with them and explain why you want to save money. Explain to them that you need to save for emergencies and for the future. Teach your children that the money you make from working is not all being spent. Every time they receive money, teach them to put some money in the Saving jar.
Teach Them Spending
Teach them about spending. Every time you buy something, you are teaching your children that spending money on that item is okay. If you are always buying them toys and Happy Meals, then that is what they will learn to do with their money. When you spend your money on another new car, more gadgets, or excessive entertainment, this is what your children will think they need to spend their money on when they are adults. Every time your child wants to buy something at the store, discuss with them how much the item costs. You can compare the cost of the item with another item and explain the differences in values. Explain to them that even the money in the Spending jar should be used wisely and that they might have to save up for the right item. Teach them to spend most of this money on useful things.
Learn From Your Mistakes
How can you teach your children if you have failed with your own personal finances? The first thing for you to do is to correct your financial situation. Do this for your own sake. At this point, it doesn’t matter what you try to tell your children. Your actions are speaking louder. If you spend everything you make, buy more stuff on credit, and live paycheck to paycheck, this is what your children will be familiar with when they are adults. Correct your mistakes while your kids are young.
If your children are older, especially if they are teenagers, have them work with you while correcting your financial situation. Get your household on a budget and involve your older children in the process. Have them learn with you. Teach them the word “no”. Explain to your teenage children why you are going down this path of living on a budget and paying off your debt. Explain to them that you are wanting to better your financial situation and ultimately their financial situation, so they don’t have to make the same financial mistakes that you did.
We all want what’s best for our children. We try to keep them safe and teach them academics and about life. What about their financial life? Who is going to teach them? Whether you think you can teach them or not, they are going to learn from you.