Explain Money to Your Kids
Tomorrow they’ll understand the challenges in checkbook balancing, vacation savings and donating to Santa. They will, if you teach basic economics today. Help them see how spending habits impact savings and their future.
Our friends seem to fall in two camps: In one, parents are set for life and don’t focus on financial planning or retirement. In the other, parents are desperate to learn what’s best for their children (and themselves). Having children later in life prepares us to care for a young family better than our younger counterparts. Unfortunately, while trying to teach the basics, we find we’ve never really mastered them ourselves.
Children need to learn the dangers of purchasing beyond their means. If they can’t afford the purchase they’ll derail their savings (or yours). Have them prioritize purchases, using allowance or piggy bank. They’ll soon experience money disappearing and an inability to buy more stuff.
Check out our resource page for some great first steps.