How to Raise Financially Responsible Children

by admin on June 24, 2010

Many parents want the best for their children: the neatest friends, the most prestigious school in the locality (country), the most lucrative profession, fame and respect in spades. Such parents often work themselves to death in order to supply their offspring with the worldly goods. They do not realize, however, that the best they can do for their kids is to instill in them the proper qualities, values and behavior that will help them in their life as adults. One of the most important and practical lessons a parent can teach is financial responsibility: the sober attitude and careful handling of any pecuniary issue. If you want to bestow this priceless gift to your own children, here are a few things you can do.

Start explaining your children financial matters from a very young age. For starters, you can let them count the change or even calculate how much a candy may cost. Take your little ones to the store and talk to them about prices as you shop around. Once they feel comfortable with coins, switch to banknotes: let them count the exact amount of your purchases and even pay at the till.

In the beginning, keep it as simple as possible. Try to make things fun and interesting. Tell your children about different denominations and show them foreign coins and bills (there is plenty of information available in bookstores and over the Internet).

Collect pennies with your kids and store them in piggy banks. You may make plans together on what this money will go into. The more attractive the project you are saving toward, the more enthusiastic you’re children will be. Start giving them allowance from an early age. The exact amount of the allowance should depend mostly on the child’s age and character. If your kids are able to easily grasp concepts such as budgeting and saving, you may consider entrusting larger sums to them. Do not be put off by the tender age of your son or daughter. Remember: the younger the children, the easier it is to have influence on their spending habits and future financial strategies. As an aside, a recently published study found out that the allowance given to children between six and seventeen years old varied from two to twenty-five dollars per week. You may want to keep these figures in mind when you decide on how much you want to give to your children.

Increase the allowance in proportion to the expenses of your children and the responsibility that comes with these expenses. In general, the older the children are, the larger their expenses get and, respectively, the bigger their allowance should be.

Learn not to be too demanding on your children and forgive them money management mistakes. After all, they are not bankers or accountants (or at least for the time being). If they spend all their allowance, bail them out once in a while, but only after you have negotiated with them the conditions.

Be open about you finances with your kids – introduce them to the financial problems of adults as early as possible. Encourage them to ask you questions and do not curb their curiosity. Do your best to be informative, interesting, and interested.

If you manage to put these pieces of advice into practice and teach your children financial responsibility, you will give them a steady foundation on which they will be able to build later in their lives.

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