We live in a society that is plagued with debt, with 2015 statistics showing that the average family in America has $132,086 in debt, with $15,310 of it on credit cards. Some debts are unavoidable for most, like mortgages and car loans, but we have definitely become a country with a “want it, need it now” mentality, and it’s showing. Many families are starting to realize the dangers and pitfalls associated with debt and managing to sacrifice, save, and be diligent with finances to become debt free. It’s always smart to become as self sufficient as possible, and it’s a lesson we can teach our children from a young age. Teaching them now can save them years of becoming a slave to debt in the future. Here are some important lessons we can teach our children now to help them become money wise.
It’s ok to wait to buy something you want
Saving up to buy something seems to be a lost art these days. With credit cards at our finger tips we buy what we want, when we want it, with little thought and whether or not we have the money. We are living on borrowed money, and it’s not a wise lesson to teach our children. Patience is a valuable virtue!
Next time your child has to wait in line for their turn on the swing, or a ride, or an ice cream cone…be sure to remind them that sometimes we have to be patient and wait for things we really want. And then when the experience is over ask them “wasn’t that worth waiting for?!” Most likely they will say yes. This is so important for raising children who don’t feel entitled…
From a young age, my children have had to earn money from simple household chores in order to save up for toys or experiences they wanted. This can be taught from as young as three-years-old. Children are always stating their wish lists, which I try not to blow off because I think it’s important to have goals and dreams, and we can nurture those goals and dreams in our kids by encouraging them to work for them. If there’s a specific toy your child would really love to have, make a chart showing how much it costs, and how they can earn that money. Maybe they can earn $1/day by pulling weeds or helping out with household chores. You decide on the jobs, but more importantly keep marking their progress on the chart. Help them to see that hard work and patience pays off!
Making choices on how to spend money
My daughter will be 18 next year, and I am realizing how very quickly these formative years pass by and questioning ALL THE TIME if I have taught her everything she needs to know to be on her own soon. She recently started her first “real” job this past year, and although that first paycheck was super tempting for her to spend on clothes and make up…she was (to my surprise) very wise about saving some, spending some, and giving some away.
These are three important lessons to teach from a young age. Give each child three jars marked “Save. Spend. Share.” and whenever your child earns money or gets birthday money, teach them how to divide up their money appropriately between the jars. Teaching children that earning money isn’t just for spending, but also for saving and sharing are important life lessons, and will serve them well as they get older.
Managing a budgeting and credit cards
As children grow older they should be well versed in budgeting before they leave the house for their college years. This is something I wish schools would help teach, but it falls on parents shoulders to make sure they understand the phrase “living within your means”… Planning the monthly family budget with your teens present can help them visually understand what is coming in, what goes out and how much is left. Teach them that credit is important to build for future purchases like a home or a car, but to build it responsibly. If they abuse their credit cards by paying them late, or racking them up, it can have devastating consequences on their future financial security. They should only have a credit card if they can pay it off monthly. Also be sure their first credit card is low interest and has a manageable balance.