Photo courtesy of Brad_Chaffee via Flickr
(Creative Commons License)
Recently, I was asked by Elizabeth Mitchell, writer for SheKnows.com, about how to teach your kids about money.
Below are some of the thoughts I gave her, as well as some that I’ve added since the article came out a few days ago. I’ve also included a link to her article with more tips on how to teach your kids about money at the end of the post.
A. How to teach your kids about money (the right way)
If you think your kids don’t understand money, think again. The question isn’t whether or not you’re developing your child’s money habits, but whether or not you’re developing the RIGHT money habits.
“But I don’t ever talk to my kids about money,” you say?
It doesn’t matter. The phrase, “Monkey see, monkey do,” couldn’t be more fitting for this situation.
For example, if all they ever do is see you swipe your credit card, but don’t ever see you pay the bill, that’s a problem. Depending upon the source, the average American has anywhere from $3,000 to $8,000 in credit card debt.
My guess is that the reason that number is so high is because most parents never talk to their kids about money.
Why?
Because THEIR parents didn’t talk to them about money.
Why?
Because THEIR parents…well, you get the idea.
Money is one of those “We’ll talk about it when you’re older,” topics. The problem is “older” turns into never.
Before you know it, they are off to college and the last thing they want to do is listen to you about how to handle “their” money. And by “their” money, I really mean your money, deposited into their bank account.
B. Have them work for their allowance
One of the worst things you can do when learning how to teach your kids about money is to just give them money whenever they ask for it.
Instead of just giving them an allowance, no questions asked, have them work for it, instead.
For example, if you normally give them a $20 weekly allowance, tell them they can earn their allowance in the following ways:
- Do the dishes = $5
- Mow the lawn = $10
- Clean the bathrooms = $5
- $5 + $10 + $5 = $20 allowance.
No chores? No allowance.
You may experience some resistance at first, but they’ll begin to see the connection between work and income.
After a few weeks, contrast their new attitude with the old “I’m your kid, so I deserve money” attitude you were likely getting from them prior to instituting this “work for pay” allowance and you’ll see the value in this system.
Not to mention, you’ll have just delegated 1/3 of the housework to your kids ;-). Talk about killing two birds with one stone!
To read some of my other thoughts on how to teach your kids about money, read the full article on SheKnows.com titled, “Start Young: Teaching Teens Smart Money Handling” by Elizabeth Mitchell.
