A Dad’s Point-of-View
What are the biggest problems in marriages? Kids? Money? Sex? Communication? All of the above? What are the biggest challenges in parenting? Yep, all of the above – except sex, of course, ‘cause we don’t even want to think about that!
How we communicate with our kids and what we teach them about money will define their lives. Heck, they define ours, right? How often is communication or most specifically, poor communication, at the root of any problem you may be having with a friend, spouse, co-worker, boss, or child? Maybe all the time?
When you combine both bad communication with bad money habits, you have a recipe for double jeopardy! First, let’s address the bad communication part of the equation. Many parents tend to think their children will learn by osmosis – that simply because mom and dad may do something a good way their children will do the same.
Sorry! It doesn’t work that way. You have to educate your children in all behaviors. Yes, modeling is important, but mostly modeling good behavior is just reinforcing what has been taught. Equally, modeling bad behavior might reinforce or encourage bad habits. The “Do as I say, not as I do” idea simply does not work!
So, if mom and dad are good savers, good budgeters, and know how to balance a checkbook, that does not mean that the kids will just pick it up by observance. They have to be shown and taught. There are many money games available, many online websites that can help, and classes that might offer instruction. But, nothing is better than teaching your kids your own best practices when it comes to money.
Here’s a short list of topics, ideas, and suggestions for communicating good money skills and habits to children:
Allowance should never be an assumption, but a given. Allowance should be earned by regular household chores and obligations. If those chores and obligations are not met, there should be deductions to their allowance JUST as there would be if they didn’t show up for a regular job or didn’t complete a free-lance assignment-for-hire.
When kids are beginning to read, and especially if they love to read as my boys did for a long time, provide a summer book allowance. It should be a weekly amount that is just enough to buy an inexpensive book, but not enough to buy a special book. This teaches them to save a couple weeks or more of their book allowance to buy the more expensive book. With my boys, the older one “got” that idea sooner than his younger brother. When the younger brother saw the more expensive book his older brother saved for, he then understood the value of saving. Win-win. They learn about money and they’re encouraged to read.
Christmas and Hannukah
Kids need to learn that the world does not revolve around them. When these big holidays come around, teach your kids that some of their money should go toward presents for mom and dad and other family members, while some is allocated for those in need. With Hannukah, it’s simple because it’s an eight-day holiday. We designated certain days for giving to others. While this isn’t an explicit money lesson, it’s one that combines the value of money with the value of giving.
Saving and delayed gratification
Everyone, mom and dad included, should know the value of saving and the reward for delayed gratification. As parents, we can teach our children by showing them the things we’re saving for – a new car, computer, etc. and give them an idea of how we’re saving for such items. Show how a paycheck or a gift of money is put into different places such as for bill paying or for that special item that requires an accumulation of savings. For littler kids, using separate jars often works. One jar is for spending, one for saving for something bigger, and another for charity/giving.
Banks, ATMs, and bill-paying
Let the kids come with you to the bank. Explain what a deposit is. Have them press the buttons on the ATM and ask them how much money they think you need for a week’s spending or a week’s groceries. Have them sit with you when you pay the bills. Let them see how much it costs to “run” a house.
Give the restaurant bill to your kid(s) to check and review for addition mistakes, deletions, or errors. Have them pay with your cash or credit card so they begin to learn the process. Ask them to figure out the amount of a tip and what your family believes is the right percentage for a tip. Use this opportunity to teach them little ways to save money while dining out. For example, we tell our kids that we don’t order drinks, coffee, and such out at a restaurant because the cost of those drinks for a family of four is expensive.
The ideas listed above are just the beginning to your kid’s education about money. I will continue this subject in a future column, let’s say Part Two, but I also welcome your ideas.
Share your ideas for great savings games, habits, and lessons to impart to our children in the comment section below.
Image source: MoneyScholar