When I was a kid, I can't believe that was almost 50 years ago,
my folks used to give me a nickle, dime or sometimes even
a quarter to go to the corner store. When I got that money I
had to go directly to the store and make sure every penny was
spent.
Things didn't change much when I grew into an adult. I got
my paycheck and made sure that it was gone just as soon as
I could get rid of it. Sometimes I even paid some bills.
It took me a long time to realize that some of your money is
meant for tomorrow and what is meant for today has to cover
your obligations first.
It would be easy to blame my folks for not teaching me the
right way to manage my money. It would be even easier to
blame the schools for not having a class for real life finances.
The problem is that my folks or the schools didn't pay the price
for me not learning these lessons. My wife and family did.
It's time that things change. We have gone generation after
generation of having more debt and less knowledge of how to
deal with it. We have to educate our kids, starting as soon as
they know how to count, about the necessity of saving and
controlled spending.
I believe that, if we can afford it, we should consider giving
out kids an allowance, not to ensure that they have money,
but to pay them for what they do to help. Giving them money
and not expecting anything in return is sending the wrong
message.
If you can't afford an allowance, encourage them to find ways
to earn their own money. Running errands, babysitting, mowing
lawns are all things that neighbors and friends would be willing
to pay for.
Just as important as encouraging them to earn their own money
is to emphasize the importance of putting some of it away for
things they want in the future. Believe me, as a Father of 3
and a Grandfather of 6, they all have a big ticket item they
have either seen on TV or that all their friends have that they
just have to have.
One trick I've used is to make a deal with the kids. If they
need tennis shoes, I would buy them. If I paid for them they
got the $20 pair. If they wanted the more expensive shoes,
they would have to make up the difference. It's amazing how
often the $20 pair would do just fine when they found out the
money would have to come out of their own pocket.
What I've been talking about up to now is just spending and
saving. There is a whole lot more that our kids need to know
than that. They need to learn how to budget their money,
effectively manage a checking account, know how to apply for
loans and what they can expect to pay for the priviledge of
using someone else's money, learn what they have to do to
make theirselves eligible for loans, how to control impulse
buying and the list goes on and on.
One other suggestion that I have is to get the kids involved
in your finances. No, they shouldn't have any control, but
they need to find out just how hard it can be to keep everything
going financially. It may even show them why you say no to
that $80 pair of Nikes.
It's not too late for our generation to get control of our money
but, for many of us, it has been a struggle from day one.
Wouldn't it be great if we could save our kids from going
through what we had to. All it takes is knowledge and the
willingness to pass it on to our kids and grandkids.
I have put together several links that may help you teach your
kids what they will need to know about their money. I hope they
help:
http://www.homemoneyhelp.com/BBOonline.html The Complete
Budget and Bill Organizer
http://www.homemoneyhelp.com/articlearchive.html Several
Articles That Might help
http://www.kidsmoney.org/ KidsMoney.org
http://www.metlife.com/Lifeadvice/Money/Docs/kidintro.html
Helping Your Child Understand Money
http://www.makingallowances.com/index-fs.htm Making
Allowances
http://familyeducation.com/subchannel/0,2794,65-189,00.html
Kids & Money
About the Author
Terry Rigg is the author of Living Within Your Means - The Easy
Way http://www.homemoneyhelp.com/ebookadpage.html and editor
of The FREE Budget Stretcher Newsletter and Budget Stretcher
web site http://www.homemoneyhelp.com. He has 25 years of
experience counseling individuals and families concerning their
personal finances.