By the time many of us learn how to deal with money, we are into our thirties and facing a mountain of credit card debt. And while we can’t totally blame our parents for our own poor financial management, it wouldn’t hurt to stop and think what kind of message you might be sending your kids about money.
Do you cave easily when your babies want you to buy something while shopping at Target? Is receiving a special treat something that your child appreciates or expects? When your teenager runs out of money, do you replenish her supply without consequence? What do you think will happen when she “grows up” and is on her own?
The thing is, it is never too early to start raising financially aware and responsible kids. And I don’t mean you need to teach them to be tight wads or that you shouldn’t indulge them – that’s part of the reason you work so hard. But do your whole family a favor and make sure they at least learn the basics of money in a practical way.
My heart warmed last week when I saw a young child helping his mom at the grocery ask, “Can we get this yogurt?” His mom asked how much it was, and when he answered, she offered him a choice, “Well, that’s a little more expensive than the yogurt we usually get. If you want to get that, then we can’t get the granola you want.”
Not only was mom teaching about trade-offs and budgeting, she was protecting her family’s financial position by not blowing the grocery bill to buy premium treats. Yay, mom!
So how can you save your kids from suffering financial duress in their later years while still feeling like you’re giving them the life you want to give them? First, if you are giving an allowance, tie it to some household responsibilities.
Depending on age, that can be as simple as helping put clean clothes away and light cleaning to mowing the lawn and taking the trash out. When I was young, my jobs included emptying the dryer and emptying the dishwasher. My brother was in charge of the garbage and the lawn. As we aged, so increased our responsibilities.
Beyond giving an allowance, help your kids with the management of their money. I once heard of a parent who kept track of his son’s allowance on a notecard, and each payment was divided into three categories: spending, saving and charity. When the son wanted to spend money, he asked dad what the number was, and if there wasn’t enough, he had to wait. Dad added interest to the savings category, helping show how savings can grow.
And when they came across a charitable opportunity like a Salvation Army bell-ringer or a nun collecting money for a school, the son learned how great it feels to give to a good cause.
The bottom line is, if your kids grow up without any exposure to what it is like to delay spending or consider a pricetag, you could be setting them up for a lot of financial pain down the road. Start today and give your kids the gift of financial peace and savvy.
Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.