Money is very important, and knowing how to manage it is something that has probably taken you many years. If it is that important, yet difficult for you to do, imagine how tough it is going to be for your kids. However, it is much more important with them, in the end.
The age group from 18-24 is currently the fastest growing age group filing for bankruptcy. That will be on their credit report for the rest of their lives. You can make sure their futures are bright by raising them from the start to be good with money.
1Start at home
If kids don’t learn finances from their parents, they aren’t going to learn them, and are going to end up in debt. Therefore, it is going to be up to parents to teach their children about finances. If you aren’t sure how to go about this, there are lots of financial materials you can buy to help you out.
2 The earlier the better
You want your children to be smart with money right away, so be sure you begin as early as you can – perhaps age four.
Don’t wait until they are older or until they are teenagers to do so. In fact, if you wait until they are teens, they are going to have ideas regarding money that they’ve gotten from their friends, and you will have to contend with those ideas right from the start.
By age 12, your child should be well on their way to understanding money and knowing how money works for them.
3Work with real money not credit
When you are giving your children an allowance, resist the temptation to give a small amount of spending money each month. This will only lead to you continuing to spend money on them for things like movies, games, DVDs and other things.
Instead, give them the money you would spend on them each month, and make sure it is all the money they have to spend for themselves. This will help your children learn to budget, and you will be able to keep better track of the money you are spending on them as well.
4 Teach your kids a system to manage money
Set up a family money management system, and be sure it is simple and based on a proven wealth management system.
Then, be sure your whole family uses this system, and that you are able to teach your children how to do it correctly. This will help you all to save and spend, and will show your children that there is a way to deal with their money, a way they can use for the rest of their lives.
5 Let them make their own decisions
It might be hard for you to see your children making poor decisions, however, this is the best way for them to learn. Remember, if you try to make decisions for them they aren’t going to learn.
Making mistakes is the best way for them to learn, and it is much better for them to make those mistakes when they have to deal with you, and not when they have to deal with credit card companies.
6Support and trust your kids while they learn
Your kids have a lot to learn, so they are going to need a lot of help and support. Be sure you are always there for your kids, and that you are supporting them and trusting them.
That will help them to understand you are OK with them managing their own money, and are able to trust them. They will gain more self-confidence, and be better able to trust themselves with money in the future.
7 Be simple and have fun
Be sure you are having fun as a family while you are managing your funds. That way, everyone can enjoy managing money, and enjoy spending it as well.
Dr. Jesse Brown is a wealth management and wealth preservation specialist and is the dean of the School of Business at Martin University. He is a best-selling author of the book “Investing in the Dream-Wealth Building Strategies of African-Americans seeking Financial Freedom” and “Pay Yourself First a Guide to Financial Success.” For questions or comments about this column, email browncolumnrecorder@aol.com.
