When I was growing up, my father would tell me that I needed to learn to budget. Well, I didn't know what a budget was, and he didn't teach me. My mother told me to pay myself first, but I had no clue what she meant, and she never taught me. As it turns out, this was not unusual back then and is not now.
According to a recent study conducted by Charles Schwab & Company, 53 per cent of all parents surveyed said they were uncomfortable talking about money to their children, feeling that money was too personal to discuss with them. For all you parents out there who fall in this group, Juliette Fairley, author of Money Rules: Personal Finance Strategies for Your 20s and 30s, has good, solid advise to guide you in raising your children to be money savvy.
Interestingly, her advice as to when is the best time to begin teaching your child about money is almost identical to what child psychologists recommend as the best time to begin talking about the birds and the bees. As Juliette says, "As soon as your child expresses an interest in spending your money is the time to start teaching your child about money.
Teaching the Basics
When you're out shopping, and your child asks you to please buy him something, pull out what money you have in your purse or wallet and count it out with him. If there isn't enough money to get what he wants, help him brainstorm ways to come up with extra money.
The idea here is to get children thinking about money: how much things cost, what they can do to earn money and the importance of saving. As soon as they begin earning money, set up a spending plan with them. Fairley suggests that you make it as fun and exciting as possible. Simply say, "Okay let's figure out what you wnt to do with the money you have.
Guide them through the process of saving and spending. Let's say they've accumulated $100 from babysitting, mowing lawns, extra chores and other money-earning activities. Let them decide how they want to use their money by asking how much they want to save, what thing they absolutely must have and how much it costs. If they decide they want to put some of it in a mutual fund or "Kiddie IRA," take them through the steps.
Parents have all sorts of opportunities to teach their children. By teaching their children to be money-savvy, they assure their children's bright financial future.
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