By Melanie Lockert (our staff writer)
Ever since I started on my financial journey to get out of debt, one thing has become apparent to me: most people don’t know anything about money management.
Financial education is grossly lacking in school, and by the time we do finally learn about money, it’s usually because of trial and error. You learn about money from your mistakes or maybe you never learn at all.
The only place kids can really learn about money is from their parents. My parents did a great job raising me, but I didn’t learn anything about money from them. I didn’t learn the value of saving, the cost of things, nor the power of investing.
It was only until I graduated with student loan debt that I realized I was an “adult” now and had to fend for myself. The debt I took on would have to be paid back. I’m glad that those moments are what spurred my desire to hustle and be independent. After breaking free from the financial reins from my parents, I knew I didn’t want to rely on them again.
Let’s get self-reflective here. When is the first time you learned about money? What is your first money memory? When did money start to matter in your life?
Let that simmer for a minute.
I’m sure you’ll start to see where your money habits came from, and how it shaped you today. I feel like many of us are working hard to counter some of the bad things we were taught or simply are fending for ourselves when it comes to information.
For this reason, I think it’s so important to teach kids about money from an early age. If you are a parent, you have the ability to shape your children’s money future, for better or worse. Here are some ways you can teach them about money today.
The Power of a Dollar
Next time you go to the store, talk about prices with your kids. Compare and contrast and let your kids understand how much things cost. How will your kids know what is expensive, if they have nothing to compare it to? Learning about the power of a dollar and the average costs of things can be empowering.
I am not a parent but I can imagine how easy it is to want to spoil your children and give them everything they want. But I can also see how coddling your children can set them up for hard times as adult. If you can teach your children the power of saving now, that will be a lifelong habit that can transform their financial life.
If they want something, encourage them to save for it. Encourage them to work hard and “earn it.” If you give them an allowance, share with them how they can save it for a rainy day, something special, or even their future.
Nothing is Free
I think many people that get spoiled by money or things, don’t know the value of hard work. Your kids should know that nothing is free and that anything they have is because of your hard work. Do they want something? They should work for it too. Now, I’m not saying to put your child to work so much that they stop being a kid. But I think teaching them hard work, and the value of things can help keep money in perspective when they are an adult.
They will know nothing is free and have a better grasp on how to reach their financial goals.
Talk about money with your kids and be available for any questions they may have. Money is still a taboo topic, but if we want to change that, it has to come from home first. Discuss money openly and teach the basic concepts of money management with your children.
Negotiate on the Big Stuff
I’ve already written about why I’m glad my parents didn’t pay for my college. Would I be in a much better financial situation if they did? Sure. But I’d be a completely different person as well. If you are thinking of paying for your children’s college or buying them a car, come up with an agreement that works for both of you. Perhaps they get a part-time job in college, or they save up half for a car. I think by helping your kids just enough, you can help them out financially, while also giving them the skills to be self-sufficient and independent.
Financial literacy still has a long way to go before it reaches the masses. But you can use these tips to teach your children about money and help shape their financial future.
How do you teach your kids about money?