Your Kids and How to Manage Money
It’s no secret that having children can be one of the most exciting, daring, enjoyable and frustrating things any adult will ever do. It’s also a pretty well known fact that kids are very, very expensive. With the cost of diapers summer camp, football, dance class, clothes food and college (just to name a few), your standard of living will change. Below are a few tips to help you learn about your kids and how to manage money.
Teach Them About Money
The earlier your children learn about the importance of money the more the both of you will be financially rewarded. It is hard for kids to understand that money really doesn’t grow on trees. This is one lessen that you as a parent must instill on your child as early as possible. You can play or create games that teach them basic money concepts as well as reward their hard work for cutting the grass or raking the lawn.
Child See, Child Do
It’s amazing how quickly children absorb everything that happens around them. If your child sees that you spend money like it’s going out of style the chances of them doing the same is highly likely. You are probably already aware that they mimic much of what you do. You should become increasingly aware of how to manage money when they are around.
Give a Little, Help a Lot
As your child grows older and blossoms into adulthood you must understand that $5 a week for allowance probably isn’t going to cut it. The same work they did with the lawn years before may be worth 4 or 5 times as much and you should really pay them accordingly. Chances are your kid is also interested in getting their first job and now is the perfect time to teach more about budgeting. You can insist that they are allowed to spend 25% of their pay each week but the rest must go towards a college fund. If you are able to afford it, tell them that you will contribute a dollar for each one they do. You could also throw in incentives such as an extra dollar for each mark above 80% or 90%.
Every situation is different but the more you teach your children about how to manage money the more likely they are to succeed with their own financial future. For more great information on investing for the future, look through my blog to receive the free E-Book, free budget spreadsheet, free calculators and links to various tools. We also have a few leaked videos to help with your finances.
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We also have an epidemic of children being born with learning disorders and various autism spectrum disorders. So you can add a lot more zeros to the cost of having a child if you are so lucky. Therapy is not covered by insurance and most schools really don’t have enough resources for special ed classes.
Estate planning and insurance is critical to help the families of such kids since a lot will have trouble keeping and maintaining jobs in the future.
Thanks for the comment!
That is one unfortunate but very real aspect we didn’t touch on in this post. There are many other points that are worth mentioning in the future such as the cost of having to care for elderly parents. I think most people do not factor that into their own financial equation.
Brandon
I agree very strongly with this post. Once you teach kids how to save money, they can actually get addicted to it and it becomes habit. I would also add that they need to contribute some portion to taking care of either the household expenses or their own expenses.
With our country in the midst of a debt crisis, I believe it is only a reflection of each of our poor money management decisions. In order for our government to learn control, we need to tech our children to have control.
I agree with this. How long did it take you to research? I’ve got a small business using merchantnational.com but am always looking for ways to get better.