How do you teach your kids good money management skills?

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  1. tritrain profile image77
    tritrainposted 10 years ago

    Considering that people can get credit cards so young and that college tuition is going up about 20% per year, I think that young people are starting off handicapped.

    What do you think?

    How do you try to pass along good spending/saving/investing habits?

    1. Eaglekiwi profile image78
      Eaglekiwiposted 10 years agoin reply to this

      I wrote a hub about teaching kids about money.

      Personally I think its important to start as young as you can ,of course not using money to begin with ,but maybe for rewards.

      It worked well when my sons were very young and income was limited.
      They learned to feel good about earning 'treats' or an outing as a privilege and not a right.

      We had the usual moans and groans about their friends who recieved an allowance for doing nothing, as they grew of course.

      My answer to them ,was nobody gets paid in this world for doing nothing ( sadly thats changing) ,your dad doesnt ,I dont,so do you think it fair that you do?
      One son (theres always one) wanted to negoiate higher wages ,lol, and we remained open to all of their ideas roll

      Generally speaking its trail and error ,but if you are fair ,it can work and they learn.
      Once they learn ,they mature and will try (work) for themselves.

      Now one is married ,the other two at Uni, they all work and study still. One kid still wont buy a car ,because he doesnt want the extra cost of maintance and gas-,he walks alot lol None of them are rolling in riches ,but I am so happy they learned early the lesson of 'earning' … akes-Sense

      1. tritrain profile image77
        tritrainposted 10 years agoin reply to this

        Very nice Hub on the topic!

        I think these skills and having a good work ethic are essential.

        1. Eaglekiwi profile image78
          Eaglekiwiposted 10 years agoin reply to this

          Thanks tritrain smile

      2. saideepa profile image60
        saideepaposted 10 years agoin reply to this

        I agree with you, we have trained our son to be wise with money and he saves his pocket money[to an extreme extent hee hee]  and sometimes checks me when i want to buy something by whispering why, do really need this? oh dear have we gone too far?

    2. mecheil profile image61
      mecheilposted 10 years agoin reply to this

      I don't have a kid yet, but regularly gets to see my nieces and nephews. One thing i often tell them is that "money will still be a trend tomorrow, why spend them all today?"

      The piggy bank always works for little kids. You get to know they appreciate saving money when you see they smile when the piggy grows heavier. And when you help them plan what they should buy with their savings, they slowly develop a mind that easily identifies possibilities of gaining money from the item they want to spend for.

      As for spending for personal things, i try to make them see the practicality of buying more of the needs and less of the wants by asking them three basic questions. "What do you need it for? When do you need it? Why does it have to be this and not the other?" Their reasoning helps them asses the importance of the product themselves. But I make sure i don't sound like a cop in doing that.

    3. jpcmc profile image92
      jpcmcposted 10 years agoin reply to this

      It's hard for children to grasp the concept of money especially at a young age.  It is very important that the concept be taught using concrete examples first.  The concept of barter is a good place to start when it comes to teaching about money.  They can compare which objects are more valuable to them.  They exchange toys and other materials they own with other kids.  OF course parents should supervise this so they wont exchange something really expensive for something that's not. 

      As the child grows older, role playing is a good practice for placing value on objects.  play money is a great way to help them understand the value of money. 

      With my nieces, we usually give them 50 pesos (roughly $1) when going shopping.  They can buy anything with it or save it in their bank ( in the Philippines some banks have kiddie accounts).  Their parents teach them to save up for toys or goodies that they want. 

      What is essential is to start with a simpler more concrete concept and move on to more abstract one.  Giving them the responsibility at an early age will help create the needed foundation when they grow up.  In every step the parents should be there to supervise and direct them.

    4. profile image0
      Onusonusposted 10 years agoin reply to this

      Teach by example.

    5. michelemacwrites profile image61
      michelemacwritesposted 10 years agoin reply to this

      I believe that kids better value money and treasure the things they have when they had a major part to play in acquiring them.  They need to learn the importance of hard work and saving towards a goal.

      1. rebekahELLE profile image87
        rebekahELLEposted 10 years agoin reply to this

        I 100% agree with you, starting at a very young age. Preschoolers can easily have 'jobs' around the house. Parents need to say no more often, kids don't need every toy and gadget they want.  I like the response of that little boy who asked mom if they really needed it! smile

        If more students had to help pay their college tuition, it would mean much more to them.  I helped my son secure loans for university, and helped make payments while he was in school, but it was understood, once he graduated, the payments were his responsibility. He also worked part time throughout his college years. He secured a well paying job before graduation! Now he makes considerably more than I do, and continues to learn that financial success is a responsibility, not just a reward.

  2. Daffy Duck profile image60
    Daffy Duckposted 10 years ago

    One way for kids to learn about money management is to get them to start buying certain things when they're old enough.  There are so many things kids want now a days and they always come to the parents for money.

    When I was growing up I did chores around the house like mowing the lawn and would get paid for it.  I rarely got money the rest of the time from my parents.  I usually had to take bottles and cans to the store for extra, but I learned how to save for things I wanted.

    Today kids get more money for the same tasks.  They have expensive tastes like video games, cd's, phones, and whatever else you can think of. 

    I believe that a parent should make their children pay for part of what they want sometimes.  Parents buy their kids gaming consoles and games for christmas.  Get the teenager to do some house work or something to earn some money.  Tell them that if they get enough money that you will help to pay for a certain amount of whatever they want.  This way they know what it's like to work for something without actually having a job.  If you want them to pay for 1/2 or 1/3 then they know what they need.  It is up to you to set reasonable expectations on them.

  3. bestkidsfun profile image59
    bestkidsfunposted 10 years ago

    I agree. Money management should be taught in school before going to College. Spending money unwisely is a problem and can be prevented if taught in school. It's a shame that most schools don't teach students how to manage their money correctly. It's really the most important thing, besides getting a higher education.

  4. mommyneal6 profile image79
    mommyneal6posted 10 years ago

    The best way is by them doing chores and earning the mony they want to spend on WANTS. They will get the value of a dollar pretty quick.

  5. earnestshub profile image89
    earnestshubposted 10 years ago

    I agree, teach by example.

    They will get the finer details right when they leave home and start realizing that electricity costs money, as does soap powder and a hundred other things that were paid for by mom /dad that they hadn't considered. smile

    1. Peter Owen profile image59
      Peter Owenposted 10 years agoin reply to this

      Problem is they don't leave home now. They just want to go on to graduate school (paid by ma and pa of course), and then start looking for job at 24. When they get one, they still don't leave.

    2. profile image0
      Onusonusposted 10 years agoin reply to this

      Absolutely, My parents were very frugile, and so am I. I save my money up and buy a couple of nice things instead of buying a bunch of cheap crap. The rest goes into a down payment on the next house, colledge for the kiddies, and emergencies.

      1. earnestshub profile image89
        earnestshubposted 10 years agoin reply to this

        Cool plan!
        kids cost out at a million or so each to raise and educate here, so 2 child families are pretty common. smile


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