Do u Want your
children to develop good money habits for life? Then teach them well
from the start. Use these tips from parents and top personal finance
experts as your lesson plan.To help your kids master essential money skills—and some day break free
from you—devote time to financial home schooling. Parents are the
biggest influence on their children’s financial habits, more so than
work experience or financial literacy courses.
Here are 6 Ways to Teach Your Kids to Be Financially Independent
1. Tie a “No” Today to a “Yes” Tomorrow
“My wife and I have three children, ages 6,
4, and 2. While they are still a little young for in-depth money
lessons, we make a point to involve them in family finances and try to
make talking about financial responsibility and independence a part of
our daily life. This usually happens in a thousand little, ordinary
ways. An instance that comes to mind is when my four-year-old son asked
if we could go to a local pizza and games restaurant that he loves. I
said no, but went on to explain to him that it costs a lot of money for
our family to enjoy an evening there. I reminded him of our vacation in a
few months and said we were saving up so that we can have a lot of fun
on our trip. It was a good way to teach him about the important
principle of delayed gratification and the lesson that sometimes you
have to say ‘no’ to things you want now, to enjoy better things in the
future.” —John Schmoll
2. Let Them Make Spending Mistakes.
“From the time our children were three or
four years old, we’ve given them opportunities to earn money by doing
chores and projects. When we’re out shopping, they can bring their own
money and spend it however they’d like (within reason!). Not only do
they learn money management skills, but this helps prevent the ‘gimme’
attitude. If a child sees something they want and asks if we can buy it,
I always respond, ‘Do you have enough money for it?’ It also gives them
the chance to make money mistakes. They’ve learned valuable lessons
when they’ve purchased cheap items that broke almost immediately, and
we’ve had great discussions on how to make wise purchases. We’d much
rather they made $3 mistakes when they are little to hopefully prevent
some $3,000 and $30,000 mistakes down the road.” — Crystal Paine,author of Say Goodbye to Survival Mode?
3. Show Them That Work is Rewarding
“’I get an M&M mama?’ my talkative
toddler asks. I reply, ‘Yes, if you complete the job.’ Even at 2 1/2
years old, I’m attempting to lay financial foundations in my son’s life.
At this age, he doesn’t care a thing in the world about real money, but
when I break out the M&Ms he knows I mean business. That’s because
chocolate is a special treat reserved for a reward. At this stage, candy
talks, and I can teach my son about finances with food. He is learning
that when he uses the potty, picks up after himself, or helps me with a
chore, he is paid for his work in delicious, color-coated chocolate
candies. He’s beginning to understand that hard work is rewarded. That’s
a trait my parents instilled in me, and I desire to pass along. Cash
and chore charts will eventually replace sweets, but until then, candy
paychecks are perfectly fine by him. Coins just don’t taste as good.” —
Kim Anderson
4. Break Out the 24-Hour Rule
“I’m blown away that my teenage daughter
still remembers going to the flea market together years ago and learning
a cool buying lesson from her mom. (As all us moms know, this is a rare
and exotic occurrence!) Though I liked a pair of earrings, I waited a
day to think it over, knowing that they would likely still be there if I
changed my mind. Sure enough, after a day of thinking about it, I
realized they weren’t all that special and that I’d rather wait to get
something that I loved. To this day, whenever my daughter and I are out
shopping and can’t make a decision, we invoke the ’24 Hour Rule.’” —Beth
Kobliner
5. Talk About Debt, Too
“My two boys aren’t quite old enough for
serious money lessons yet, but one thing I’m excited to teach them early
on is the importance of smartly managing debt. If they want to buy
something on their own, like a toy, they’ll have three choices: 1) Buy
it now, 2) Save to buy it later, or 3) Borrow money from us. If they
choose to borrow, they’ll have payment terms and interest just like a
regular loan. My hope is that they can learn the consequences of debt,
both good and bad, before it has any real-world implications for them
and without the lectures and scare tactics. Then they’ll have the skills
and experience to make smarter choices once they’re out on their own.” —
Matt Becker
6. Make Them Work for Wants
“A key factor in reaching financial
independence is what you spend. Some spending is needed and necessary.
But it’s the ‘wants’ that can get people in trouble. Therefore, when our
kids ask for a non-essential item, we reply with a two-step plan: 1.
First, wait a week. If you still want it, we’ll get it then (most times
the ‘want’ goes away by the end of the first day); 2. If you still want
it after the week passes, you have to work around the house to earn half
of the purchase price—even if you have enough in savings to pay for it.
The second step forces them to think if the amount of work required to
purchase the item is worth it to them. If they follow through with the
required work, then we know that they’re serious about the purchase,
rather than just expressing a fleeting, short-term desire.Several times
the “acquiring of money to pay for the thing” becomes almost exciting as
the actual purchase.” — Kevin McKinley
culled from http://time.com
