I want to give you two quick tips on to teach your kids about finances or money.
Two things that my mother did for me which now as adult I realize helped me tremendously:
The first thing she did was give me an allowance. She started giving me an allowance at a very young age and she structured it just like pay checks. So, by weekly I received my allowance.
The second thing she did was she let me fail and that was the key ingredient to me learning about finances, and learning how to analyze my spending.
It is no different than when you teach your child how to ride a bike. You put rules in place. You have training wheels. Then eventually you take those training rules off and something happens. Now as a parent that’s where you come in and you decide if your kid will ultimately learn from it or if they will become dependent on you going forward.
So, when my training rules came off of my bike, I knocked over neighbors, I ran into a bush actually, and fell, scuffed up my knee a little bit. The second thing I did was I actually knocked off the neighbors side view mirror. So, instead of coming to my rescue, my parents, my mother basically said, “you know you are going to pay for that mirror, right”. It’s the same thing what financial mistakes that your kids make.
So, in essence the two tips are:
Structure allowance is similar to pay days and pay checks. This will stimulate the real world. When, your kid makes a mistake, and they will make a mistake. Let them know that they have to pay for it out of their allowances. So, if they spend their money too fast, don’t give them more money.
If they don’t save enough money to get to their friend a gift, do not get their friend a gift for them. This teaches them about budgeting.
So, just like if they are learning how to ride a bike, you can’t be there pedaling for them. They got to fall. They have to learn balance. They need to learn how to ride their bike. It’s the same thing with money. They need to learn how to spend.
They need to know how to deal with impulses. So, when you become an adult, you don’t have any issues where they have to come back home and they are always begging or asking you for money. Because, you told them how to spend their money correctly. Those are my two quick tips.
Share your experiences and tips with me
Also check out this article about 12 Things I want My Kids to Know About Money. It’s a great read!
Leave a comment below specifying your tips for how to teach children or any one about money in general.