Your Parenting Matters

My partner and I are working on becoming more conscious of our finances. We are reading a book together which helps you identify where our ideas about money came from and how they help or interfere with our ability be a successful money managers as adults.

I thought it would be a good idea to provide some tips on how you can help your children become more responsible about money and have an easier time with their finances.

With credit cards being sent to teens and college students, it is important to start early teaching children how to handle money. When parents neglect this important area of a child’s education the results can be disastrous as many of my friends of young adults are experiencing.

Give an Allowance
I remember wanting an allowance when I was a kid. I ask my mom if we could start doing that and her response was, ‘You don’t need an allowance, if you need money just ask me.’ I never felt good about having to ask for money. First of all, what I wanted to do with the money always had to have her approval and secondly, I never felt in charge of the money I was given. Consequently, I spent many years as an adult questioning myself about whether I made good money decisions.

An allowance should be given without being attached to chores. That way you remove the possibility that a child will choose to give up an allowance by choosing not to do any chores. Children should help around the house just because they are a member of the family. An allowance is the child’s share of the family income.

Young children can start with a small amount every week and get to decide how to spend it. You can require that the child save part of their allowance or give a portion to charity. These are decisions you make as a family.

As a child gets older you can increase the allowance. You need to have a discussion about what you think the allowance should cover and make exceptions for getting paid when there is a job that is outside of the normal household chores. Washing all the family cars, or cleaning the yard or spending the day helping with spring cleaning are jobs that can earn extra money.

And, try not to be pressured in having to buy ‘designer everything’ for your children. I often shopped at discount stores when my girls were in elementary school. One day we got out of the car and my oldest daughter said she did not want any of her friends to see her shopping there. I told her not to worry, if she saw a friend there, they wouldn’t want anyone to know they were there either. She got it!

A good idea for teens to help them become good money managers is to set a budget together for all their needs. Create budget for the usual monthly expenses that you feel comfortable with and let them manage the money. What great training to learn how to make the money last for the month. And, if they run short before the month is over experiencing the consequences of the shortfall can prove invaluable latter on. These attempts at money managing should be encouraged and take care not to judge or criticize their purchases. Remember that what your child decides to buy with their own money is their choice.

Open a Savings Account
When your child has been able to save a minimal amount, take them to the bank so they can open their own savings account. You might want to encourage saving by matching what they deposit and suggest they save half of any large amounts they get from birthday presents or other sources .

If you are interested, share your knowledge about tracking some stocks that your older child would be interested in. The internet makes it very easy to track them online. It might be a way for you to start your own education as well.

When a Job is a Good Idea
When your children reach the age where a part time job would be a good idea, the lessons you have provided for them around money will come in handy. You can encourage your teen to get a job by only providing and allowance that covers their bare necessities. That way earning money by working for those new CD’s and IPods will look appealing.

Managing money is just another aspect of helping your children make choices and learn from the consequences of those choices. The STEP approach to child rearing makes it easy to train you children and taking an online parenting class is an easy way to learn these valuable parenting skills.