Wednesday, March 25, 2015
Teaching children money matters
Teaching children to manage money is a daunting task, especially when they are yours. Somehow, they manage to interpret every lesson or discussion as a territorial struggle. Sure, you want your kids to learn independence, and some parents believe the only way to make kids self-sufficient is to have them learn from their own failures. That may be true in some cases, but in matters of money, harmful behaviors, or education, intervention is key.
A recent study revealed that 40 percent of parents neglect to teach their kids personal finance. While schools are now required to incorporate some financial literacy into core curriculum, it's unfair to expect teachers to carry that burden on their own. Especially when local governments are not providing these teachers with any training in financial matters. Similar to past education-based attempts, the school system is still trying to sneak the topic of money into classes without much support. It's like a hit or miss strategy, although the rise in financial lit advocacy has been helping push awareness through volunteer workshops and classes catered to teachers and students.
As with any matter related to the future education and well-being of children, it starts at home. Most kids shut their brains off after leaving the school for the day. It's up to us, the parents, to encourage our kids to apply what they learn to the real world.
So, how do we raise the next generation of financially healthy and wise adults? Through coaching and encouraging. Allow me to take you back a minute to when our demanding, unpredictable teens were precious toddlers. We learned through parenting books and our own failed experiences the best way to teach kids anything was by sneaking it into their lives. I'm talking here about that broccoli they hated, but we still added to their lasagna. Or the beans we mushed into a dip and had them spoon up with chips. Now apply this to money matters.
Instead of telling your kids how they should manage their money, discuss personal money decisions you're making, why you're making those decisions, and what you strive to accomplish with that decision. Instead of mentioning how your checking account is dwindling to near zero's if you don't watch next month's spending, talk about the importance of budgeting. Rather than label a purchase too expense, broach the topic as a saving strategy for a long term expenditure. Apply the lessons to real life goals so that children understand cause and effect. It will make it that much harder for them to shut that side of the brain they used to absorb all that curriculum throughout the day.
As for independence, that comes with age. If you believe your child may be going overboard with his spending habits, I'm a firm believer in intervention. Explaining to your child that you are interfering because boundaries have been crossed is not mean. It's parenting. If your kids learn anything, it is that there are consequences for being irresponsible. That's a lesson that will be learned and applied to any experience they encounter.