Do you ever wish you had the knowledge you have now when you were younger? You certainly could have saved yourself a lot of heartache and most likely a lot of money.
Often I hear a parent amazed that when their teenage child leaves home that they have no idea how to handle their money and finances. The child is unfamiliar with what their day to day expenses are and how to live within their means. My question to the parents is what did you take the time to teach them when they were still at home? We all know that you don’t turn eighteen and somehow miraculously know how to shop for car insurance and balance your checkbook.
It is never too early, and hopefully not too late, to teach your children about money. The basis for any financial education should be how not to spend more than you have. This is a concept that even a young child can learn. Your child will need to have money with which to learn this skill. So either a performance based allowance from chores or a set amount that you determine should be given to the child on a weekly or monthly basis. Be consistent with your schedule of payment so that it mimics a paycheck. Then your child can learn how to save for larger items and that all important lesson of delaying gratification.
The system you establish at home doesn’t have to complicated. Money can be kept in a piggy bank or jar. If they have specific goal of purchasing a certain item such as a video game teach them how to put aside a set amount with each payout of allowance to reach that goal. It is amazing how much thought a child can put into spending a dollar at the store when they are spending their own money and not yours!
As your child gets older you can expand on what you teach them. Are you shopping for car insurance? Why not have your thirteen year old help you with the process. Talk about why you are contacting different companies and what you are comparing among those companies when you make your final choice. Are you planning a family trip or maybe a big purchase? Talk with your children about how much you have budgeted to spend and as a family work through the best way for that money to be spent.
Teach your children now when the possible mistakes made are smaller in dollar value so that they avoid those expensive mistakes later in life.
