Friday, 5 October 2012

Teaching your Kids about Money

So when do you start teaching your kids about money? The answer is simple.... As soon as they can comprehend the logistics of it. My daughter just turned 3 and I am thinking about going over money with her and teaching her what everything is called, how much it's worth etc. Also as soon as I feel she is old enough, I will give her an allowance once a week and teach her about spending and saving. They say giving your child $1 for every year old is what you should do depending on your financial circumstance. So let's say I start giving my daughter an allowance now. I would give her $3 a week every week. I would also make her save 10% in a piggy bank or open up a bank account to teach her about saving. The rest would be free money to spend on candy or toys etc but I would still instill my good spending habits on her regardless. (I am frugal you know).

So when do I start giving her an allowance? I think I am going to start off by teaching her some basic principles. See how she reacts with the information and if I feel confident she can handle it, I will then start giving her an allowance to spend as she likes.

Kids learn from our spending habits. Hopefully you will pass on good spending habits to them so that they will have the skills and tools needed when they get older to live on their own and be self sufficient.  My parents taught me about living a frugal lifestyle, my mom was always couponing and always had a list while grocery shopping. We never had fancy clothes (usually shopped at a thrift store) and we never had the latest and greatest gadgets but we lived a good life and a modest one. I guess I have just acquired their spending habits and love them all the more for it. I don't care that my husband and I make  "decent money", the only reason we are as well off as we are is because we manage our money wisely.  I know people that make twice as much money as we do yet they are always in debt. Why? Maybe their parents didn't pass on good spending habits or money managing skills. As much as I don't like them for making more money then we do, I kind of feel sorry for them being in debt all the time. Being in debt is never fun.

Now, I'm not saying your kids will never get into financial trouble. Somethings they will have to learn for them selves and from their own mistakes. But at least if you give them the tools, they can get themselves out of trouble. I learned from my own mistakes and got myself out of credit card debt. I did it and will never do it again because I learned the hard way. I didn't go as far as having creditors knocking on my door or phoning my house but have a few thousand dollars in debt at 21% I felt like I was never going to pay it off. That's what I get for paying for a trip to Cuba with credit before I could actually afford it. Lesson learned!

I just hope that both of my kids will learn the value of a dollar early on and never take anything for granted. If they want those designer jeans they will have to get a job and pay for them them selves. If they want to go to College or University I will pay a portion but not all of it. They need to prove to me that they want to be there. If I just hand everything to my kids they will never learn, they will always rely on other people to buy things for them and bail them out. I want them to learn how to be self sufficient. That is my ultimate goal, if I die knowing my kids will be alright on their own I will die happy.

Take your kids to the grocery store next time you go and teach them about buying the necessities, taking a list with you, meal planning, etc. Talk about saving for a rainy day but that you never know what tomorrow will bring. Save some money but not all of it as you still need to have a life and live a little. You never know, you could die tomorrow.....

I hope all of you with kids will instill good habits. Maybe if you're more conscious about it you will think to teach them more often. Even if you don't think they are listening, trust me, they are =) I didn't always listen to my parents, but even to this day I still remember my parents talking about the value of a dollar and thank them every day for it.

Thanks for listening!