The first step to teaching your kids how to handle money is being a good example.
I showed my son the budget for our holiday last night. He was impressed that we had so much money to spend. Here it is – we have £287 (that’s about $450). That is not a huge amount of money in England (and you’ll know it’s peanuts in North America)! The adults know that we are on a tight budget, the kids think we’re rich.
I had a bit of a giggle about this, and I sat and wondered how best to let my son understand what this all means. I’m sure you can sympathise with me here. How often do we do anything with our kids and have the constant questions like “Can I get one of those?” or “Can we go to that place?” and my favourite “Can we buy just that one small toy?”. I get it all the time, and my go to answer has been, “Well not at the moment but we can sit down and think about it?”
THINK ABOUT IT! Well that’s easy for me because I know my budget, and I know how much money that I have set aside at any given time. For my kids, thinking about buying things and spending money means almost zero to them because it’s such a foreign and abstract concept.
For the majority of children out there, understanding money is really difficult. Why is that? I think it’s because we just don’t talk to our kids about money often enough. Especially in this world when we use direct debits and bank cards to make payments, they just don’t get a good idea of how money works. When I don’t have money to buy something, my daughter often points out to me that “Dad, just use your bank card.”
Is it wrong to show your kids the budget? I think it’s the completely correct thing to do. Now I’m not saying that I’m going to sit my kids down and go through a line-by-line statement of every single thing coming in a going out in a month. I’m not proposing to show them how we’re going to make sure we’re still in the black at the end of the month. That’s my job. However, every once in a while, showing them how much money we have for, say, our pending trip, and then showing them how much things are going to cost on that trip is a good thing. I could already see my son (9 years old) mulling over some of the choices we are making for the trip.
Do any of you out there have any great ways of teaching your kids about money?
Do you think that teaching them money skills now will help them become better adults?
I think it will. I’m really interested to see if demands for everything on the shelf decreases because they know that we aren’t drawing money from a bottomless pit! It’s always good to have hope…