10 Ways to Teach Your Child How to Be Responsible with Money
As parents, we worry about our children all the time. We worry about who and what they will become and about how they will handle responsibility. It is so important that we teach our children how to manage money. Start teaching them about money when they are young so they can get into good habits with their money.
A recent survey showed how important it is that we teach our children about money. Charles Schwab and Company recently published an online survey and the results are stunning. Parents had taught their children to do laundry over 70 percent of the time. When it came to balancing a checkbook, only 34 percent of parents had showed their children how. Here are 10 ways to teach your child how to be responsible with money.
1. Discuss it. Many times parents feel that it is better to protect their children from financial trouble. If you aren’t honest with your child about your family finances, they won’t know how to handle their own finances one day. It is important that they understand that you can get into financial trouble if you are careful. Find the best time to discuss finances with your child, whether it is one-on-one or in a family setting (like the dinner table).
2. Get an Account. Open a savings account for your child as soon as you can. If they are young, you can be on the account with them. Take a field trip to the bank and help them understand how these savings accounts work. Each time they deposit money into their account, they will see their money tree grow.
3. Don’t Spoil. One of the biggest dis-services you can do for your child is to give them everything they want. You need to set boundaries while they are still young, even toddler-aged. It is important that they understand that they can’t have everything they want all of the time. This principle will go a long way when they are older and will help them choose between needs and wants.
4. Chores. Chores are a great way to teach your children how to work. Try and reward your children in small ways to help them do their chores. If they make their bed in the morning, give them a small treat. They will begin to understand the importance of working hard. As they get older, give them more responsibility with chores. Be careful not to spoil them with treats or money, but teach them the value of work.
5. Keeping Up. Your children watch every move you make. If you are trying to keep up with the Joneses, STOP! If you are spending money you don’t have, you are teaching your children it is OK to get into debt. Stop caring what other people think and be responsible with your money so you can teach your children how to be responsible with theirs.
6. Pay bills. Let your children help when you pay bills. They will begin to understand that everything costs money. If your child is old enough, help them write out the checks. They will love the experience and learn a lot.
7. Credit Cards. Add your child to your credit card while they are still young. This doesn’t necessarily mean they need to use the credit card, but having their name in your account will build their credit. Be careful with this one. Make sure you are helping your child’s credit, not hurting it. Only add them to your card if you have a credit score over 700.
8. How to Shop. When you take your child shopping, go with a list and stick to that list. Whether you are going to the grocery store or the clothing store, they will see that it takes discipline to stick to a budget and be responsible with money.
9. ATMs. ATMs are dangerous to a young child. To them, this money is magic. If you use the ATM in front of them, help them understand where the money is coming from.
10. Don’t come to their rescue. If you have taught your child how to be responsible with money, let them be on their own financially. This only needs to happen when your child is old enough to make their own money and make good decisions about how to spend it. If your child gets into trouble financially, be careful not to save them. By doing this, you are only teaching them that they can come to you to bail them out at any time. If they get into trouble, help them work out a plan to fix the problem. Don’t fix it for them!
We all look forward to teaching our children good principles. Make sure you teach your children how to manage money and be responsible with their decisions.
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Tags: Credit Card Advice, money advice, money management, money tips
August 11th, 2008 at 12:46 pm
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August 11th, 2008 at 3:06 pm
I generally agree with most of this post. But, I don’t agree with the credit card point. If you don’t think they should have access to an ATM why would you ever put your child on your credit card? It’s the same premise…without full understanding an ATM or credit card seems like a bottomless pit to a child.