All good parents attempt to talk to their children about money and the value of the dollar but instead kids pay attention to what their parents do with money, not what they say about it. As with most things in life, the best approach for passing on good financial values is by example. You know the old “practice what you preach” adage.
In times past, “the talk and the walk” of financial management was in sync. It seems that our grandparents not only talked about the value of the dollar, they lived it. Today, however, that connection is being lost.
In our consumer-driven economy where lifestyle is often a greater priority than a legacy, the number of 2-income families has become the norm not the exception. Families have more money than ever, but spend more time at work, too. That limits the time we have with our kids which often leads to tremendous guilt for many parents. The tendency is to provide children with money, toys, and gifts in place of time. For too many people, money becomes a substitute for participating actively and regularly in our kids’ lives.
As a result, our children and youth (tomorrow’s leaders) demand more and know less about what things cost. In general, they have an expectation of immediate satisfaction, they don’t have to work for their money, and they have higher standards of living, and don’t appreciate where the money comes from. In short, we are raising a fiscally challenged generation! Add to the mix the overall availability of money to adolescents and teens. Even teenagers can receive credit cards without parental approval. For them, it seems to be free money with no strings attached; until it’s too late.
So what can we do to change the trends? We can give our kids a healthy financial perspective and teach them the basics of money management. Mostly, make sure they watch you practice these principles.
- Require children to take ownership of household chores. Even a 4-year old can be responsible for small tasks.
- Talk to them about the value of the items they buy, how they made their decision, and the options for using their money.
- Open up co-signed banking accounts for your kids. Encourage the older kids to make deposits themselves and teach them that no amount is too small to set aside for future use.
- Involve your children in family financial issues like budgeting, paying bills, setting aside funds for college/retirement and vacations. It’s a great time to discuss the difference between wants and needs.
Example: One young teen in the inner city was indignant for months because his mother would not buy him the latest NBA superstar-endorsed athletic shoe (with a 3-digit price tag). So the following month she made him go with her to deposit her paycheck and sit down to pay the bills with her. When he realized how much she was stretching her meager paycheck just to keep them well-fed and adequately dressed, he quickly realized how out of proportion his demand was. Not only did his unrealistic expectations quickly correct themselves, but he also began looking for ways that he could help the family financially. - Teach your children how you plan for future financial needs. They need to see that major purchases, vacations, new cars, etc. don’t just happen on impulse.
- Use weekly allowances to teach them to budget and help them create a spending, saving, and giving plan.
Let’s work towards raising fiscally fit children! A great book that may help you in this task is Raising Financially Confident Kids by Mary Hunt.
Healthy Blessings,
Sandy
