Teach your Kids about Money

Just before the Holidays, my seven-year old son came home from school and asked me how much money do we have? I asked him why is he asking me how much money do we have? He said that one of his classmates told them that they are millionaires and showed his new Nintendo DSLite Gameboy and said that his parents bought it for him. Another one of his classmates said that they have millions in the bank. I am quite bothered by my son’s question because I have not discussed with him money matters yet, what can you expect? He’s just a seven-year old grade one student. But I also did not want my son to feel insecure when talking with his classmates about these things. So I told him that we have enough money to live a comfortable and happy life. Then he asked me why does he have to save for his Gameboy when the parents of his other classmates are just giving it as presents. My husband and I are encouraging my son to save money from his allowance and from money he receive as gifts to at least teach him the value of saving. He was able to save at least half of the value for a Playstation last year, we just paid for the half for him to be able to buy it. We thought that if we make him save for the things that he wants, he will take extra care with his toys and will know the feeling of accomplishment when he gets what he wants. But are we being too harsh on our son when he sees or hears that his friends are getting their toys the easy way? Will he resent us in the future for this? With these questions in mind, my husband and I decided and came up with some guidelines on how to deal about teaching money matters to our son.

Start talking about money to your kids once he/she starts asking questions about it. Once your kid started to ask you questions such as how much money do you have? From where do you get your money? And why is his/her allowance is smaller/bigger than his friends? Or other questions that are related to money, then it is time that you talk to him about it.

Teach your kids the value of Saving. Tell your kids about the importance of saving for the future. Have them save a part of their allowance and have them spend it later on things they really, really want, for them to know not only how to save money but also how to experience to enjoy money and to know the benefits of having money.

Let them experience how to earn money in their own little way. You can assign small tasks to your kids especially during summer or when they are on vacation from school. You give your kid a task to do that is appropriate for his age, you can ask him to fix his bed and your bed every morning and pay him for doing it. But you must explain to him that you are doing this for him to know how it is to earn and work for money. Hopefully this will teach him not to fall for quick-rich schemes when he grows up. But you must emphasize that he should not ask for money when you ask him to do something else or other chores. You explain to him that this is just a kind of game wherein you are simulating how it is for adults to have a job and earn money. But be sure to pay him fairly and give bonuses if he performs well.

Never let you kids hear you discussing money problems. Parents should avoid discussing money problems in front of your kids especially when they are too young to understand it and too young to do anything about it. This might just cause them unnecessary worries or it might give them the impression that money is hard to get. It is important that even if you teach them how to save and how to work for money, you should also as parents make them feel that you have enough money to support the family and make them feel secure in knowing that their future is taken cared of. And remember to shower you kids with gifts and vacations once in a while, nothing wrong with that.