Tsue ~ That's What She Said: Mom Tips: Six Important Money Lessons For Children

Friday, September 14, 2012

Mom Tips: Six Important Money Lessons For Children

With the Teen Diva having just begun her senior year of high school, thoughts and discussion about her future have certainly been a popular topic for my family.  From helping her to select the best colleges and universities to visit and apply to, exploring collegiate lacrosse programs and scholarship opportunities and perhaps even more importantly, which degree she will pursue, have been regular focuses for family discussions.

With an inclination to dual degrees in engineering and architecture, as parents, we know the road ahead for her will be intense and expensive.  To ensure she has the best possible opportunities and start to her young adult life, we're glad that we have been sharing lessons of smart money management with her for some time.  Although it can be difficult to realize how quickly your child will be managing their own finances when they are young, this Mom can certainly attest to how quickly that day will come.  The days of chasing butterflies and rescuing worms seem to have happened only yesterday, even as she dashes out of the door toward teenage adventures, with car keys in hand.

There is little doubt that she has inherited her mother's fondness for shopping.  However we are pleased to see, especially during this age in which the "now" typically outweighs "tomorrow", that she exhibits restraints and conservative spending, at least when it comes to her own funds.  Similar to most teens, the Diva is more than happy to help work through Mom and Dad's funds!
With the knowledge of a solid foundation of financial wisdom installed for our teen, my husband and confident that we are on the right track for her younger brother.  Our strategy was simple.  My husband and I compared notes about what we had learned about money as children, what worked and what didn't, as well as the addition of a bit of common sense.  See our suggestions for teaching children about money below.

Smart Money Lessons For Children
  • Talk about money with your children.  While both my husband and I grew up in families in which discussion of the family budget was taboo, leaving us ill equipped to tackle the challenges of money management as young adults.  Your children will learn more about smart money choices by understanding the choices you make for the family.
  • Provide children with opportunities to make money mistakes. As in much of life, we have the potential to learn as much from our mistakes as we do from our financial successes.  Given freedom to spend allowance as they choose can provide a way for your child to understand the importance of saving for those special items they desire.  When distributing allowance, set aside a few minutes to ask your child pen ended questions about their plans for their allowance and choices they have made, focusing on providing positive reinforcement for smart decisions.
  • Tie Allowance To Age Appropriate Tasks.  Rather than provide your children with weekly or bi-weekly allowance funds simply because, tie age-appropriate duties or tasks around the house to the doling out of allowance.  As your child earns their allowance, or does not as may be occasionally, you will reinforce both a strong work ethic and an appreciation of money in them.
  • Share your shopping techniques.  Although any parent may relish the opportunity to shop child-free, make it a point to have your child accompany you on a regular basis.  While shopping, discuss the choices you make and the factors you consider in making your selections for purchase, whether you are shopping for weekly groceries or weighing the features and price points of a large item for your home.  Illustrating your money savvy in action will help your child to appreciate planned spending rather than impulse buying.  Ask your child their thoughts and opinions while shopping to keep them engaged and the experience a pleasure for both of you.
  • Reinforce the importance of saving.  Every child, as well as most adults, go through the "give me's" stage, enchanted by the material objects of their peers and that they are exposed to through media.  When your child asks, "Why not?", take the time to explain.  Help them to understand the reasons why it is important that your family saves money, for emergencies and special purchases with clear and specific examples of the choices you make to save and to reduce your spending to allow for special family vacations and purchases.
  • Remember the lesson of giving.  Along with teaching your children to be money savvy, do not forget to encourage altruism as opposed to materialism.  My family donates a portion of our holiday gift money each year either directly or through a purchased donation to local charitable organizations.  My children love helping to pick which organization will be our recipient for the holidays.
What are you tips for teaching your children to be money savvy?
What has worked for you and what has not?
Tell me in a comment below!  I'd love to hear your thoughts!

Information sourced from Genworth Financial .The opinions above are both honest and of my own experiences.


Pam said...

I think the best move we ever made with my daughter was to let her have the freedom to go away to college and manage her own money. Now there's coupons and shopping at discount stores, etc. lol

Grace Hodgin said...

While my kids were at home I did shop with them and show them how to compare prices. We were always resourceful people as well so we tried to make our things before we went out and bought them. I also allowed them to make mistakes in spending so they could learn from their errors.

Minta's Creations said...

One of the things we do is every time they get any allowance money or grades money my husband adds it on his droid so each child has an account. When they want to buy something they look at the account and see how much they can spend and how much they have left over..That way they don't actually have the money in their hands but they have an account to look at. Hope that makes sense.

Samantha said...

it is good to show them when they are young so it stays with them

Crystal Threeprncs said...

Great tips. My children can sure use a lesson or two in smart spending, already.

Daisy TrendyMomReviews said...

Great advice! My son wants everything that he sees right now, so we'll eventually have to teach him about money.

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