Building Life-long Skills
Raising fiscally conscious children during these times of constant change, economic turbulence, daily media bombardment, and digital lifestyles can be a daunting process.
Even though much of life in the twenty first century no longer seems to resemble anything close to what it was barely a decade ago, the importance of teaching children basic money skills and concepts has not changed.
Below are a few guidelines to keep in mind as you prepare your children to be financially responsible adults.
Be the model you want your children to be
Knowingly or unknowingly, as a parent, your actions, and your words regarding family finances are setting the tone and being the model for how your children will handle and manage money in the future. With that in mind, can you see your children as adults operating with solid money management skills and attitudes or are there some potential financial awareness gaps?
Notice how you talk about, argue about or say nothing about money, household bills and expenses in front of the children. All of these styles and words have a subtle but profound impact on young minds.
When shopping together, do the children notice or hear attention to needed research, price, quality, or usefulness? Do they notice calculated, deliberate, list-driven purchases or impulsive, instant gratification actions instead?
Utilize teachable moments
Stay tuned to events, opportunities, conversations, and situations where there is an opening for a teachable moment. Then make the time in your busy schedule to utilize this opportunity. For the young ones this can be as basic as connecting coins and bills with math. Another could be to then ask how many of those bills would be needed to buy the Barbie doll sets, Razor or other toys.
During the holidays, what opportunities are there for witnessing sharing, learning about giving to others, putting a percent of their allowance aside?
If the older children are given debit or credit cards, are they also learning how to review bank statements, have mini budgets, seeing the consequence of overdrafts?
Encourage enterprise and resourcefulness
Recognize and encourage the budding entrepreneur, whether it’s taking the initiative to rake the neighbors leaves to raise money for Christmas gifts, setting up that lemonade stand on the corner, reselling bulk purchased candy as profitable single pieces or creating some unique service or product online.
If your children are begging for that specific pricey video game, or latest ipad, encourage them to come up with creative, resourceful solutions for getting their desires met. What ideas do they have for earning part or all of the money? What else could they do that may not be related to earning money, but would still allow them to use or have the items they want? Kids can be extremely resourceful if given the nudge or motivated to do so.
Allow and support mistakes
Instead of bailing out your sixteen year old when he accidently drives over his bike left in the driveway, help him explore options for replacing his bike. When kids lose or forget something, especially if it is really special to them, or lose money because of a bad decision, allow them to own their experiences, simmer in the significance of them, without blaming your children.
Engage your children in a creative discussion as to how they can resolve the situation, rather than stepping in and short circuiting the huge learning opportunity.
Guide your children through the process of deciding if a purchase is a “need or a want”. Your teenager may “want” that latest electronic gadget, but “need” that same amount of money for gas to fill up the car.
At the same time teach your children how to determine value and worth of a purchase. Will that high priced air gun give your young son long term satisfaction or will he quickly be bored and want something else? Does your daughter insist on spending most of her allowance on some trendy outfit, only to watch it fall apart after a few washings?
Consider these tips as a starting point as you guide your children through the stages of financial awareness.
Just like muscles are built over time with proper and consistent exercise, so too are the skills of problem-solving, resourcefulness and creativity built over time with effective training and ongoing practice. Learning how to manage money with financial responsibility and mindfulness is a learned skill, versus an innate ability.
The payoff will come during your children’s adulthood when the real life challenges surface and all of the above mentioned skills come into play and your children handle each event as a financially responsible adult.
Judy Lawrence is a Financial Counselor, Budget Coach, holding a Masters in Counseling, and an author. Her book, The Budget Kit: Common Cents Money Management Workbook 6th Edition, has sold over 425,000 copies and has been in print for three decades. It is a perennial bestseller for Kaplan Publishing (previously Dearborn Publishers) for over 15 years and other publishers before that. She has appeared on numerous national networks including CNBC, Style Network and featured online and in print for decades. Judy is also a co-author of Magic, Miracles and Synchronicity. Visit Judy’s Web site at www.moneytracker.com. Contact Judy Lawrence by email.
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