Philadelphia Saves Week is a great time to put your kids on the track to financial success!
Where to Begin?
There are a variety of techniques parents can employ in order to teach their children financial responsibility. Below are just a few of them. Good luck!
Talk About It
Discuss money matters with your kids on an ongoing basis. Also, let your kids watch you pay the bills. This will allow them to see the real cost of things and realize that someone actually has to pay to use that plastic card or flip that light switch.
When it comes to talking to kids about money, earlier is better. You may want to start the discussion by age 5 or 6. "While older children and adults understand the inherent bias of advertising, younger children do not, and therefore tend to interpret commercial claims and appeals as accurate and truthful information," said psychologist Dale Kunkel, Ph.D., Professor of Communication at the University of California at Santa Barbara.
Give Up Control
Let your kids do things themselves. Let them make bank deposits and withdrawals, make their own purchases and decide what they want to spend their money on. Offer advice but start to give them some of the control.
Let Them Make Mistakes
Even if you think they are spending money on the wrong things, let them do it. They will learn from it and it will hurt their wallet, not yours.
Give your kids enough money to learn important financial lessons, but not so much that they think that money is unlimited. Let them learn to make choices based on financial limits. Also, it's best to only give cash to younger children, and save the pre-paid debit and credit cards for older teens.
Help your kids establish a consistent saving and spending plan so they will have some type of structure to work within as you teach them financial principles.
If you start early with a system of teaching and practical experience, you may save them from some of the traps so many people fall into during adulthood, including a failure to save and overextension of credit.
Keep them Involved
Just as essential are involving kids in some major family purchase decisions, helping them to separate facts from fiction in advertising and teaching them about goal-setting.