Everyone needs a pig in the family.
Financially responsible kids aren't reared on lectures. Lead by example, and you'll have much better results. Let your children see that responsibility is important to you. You don't have to share all of the details, but do let them know that money doesn't manage itself; it requires dedication, which pays off in peace of mind.
Lessons can begin early, long before you have that first conversation about an allowance. Let them ask questions, answer them as honestly as you can, and keep the dialogue open so they'll know they can rely on you.
Engage your children early, and help them start out with a healthy respect for something that will become a permanent part of their lives.
Resist the Urge to Splurge
Everyone wants the best for their kids, but the best isn't measured in possessions. Although it's easy to go overboard at birthdays and holidays, what message does that really send?
CBS Money Watch explains that four out of every five children say they learn what they know about money from watching Mom and Dad. Think about how you spend and save, and imagine your kids living the exact same way. Chances are, they will.
Don't Reveal Too Much
You want kids to understand that a budget is important, but don't reveal how much you earn, how much you have in savings, or how much you owe. That's too much information for a little mind to process, and it becomes a burden as they get older.
Let them see you take time to attend to your budget. Explain what you're doing, and show them what being responsible means. Just don't explain your situation in dollar amounts.
Make Money Management a Fun Activity
If you can make saving money fun, you'll capture their attention. Money Crashers recommends the game approach, and it doesn't have to involve money at first. Any reward system, such as gold stars, teaches children that they can earn, save, or spend what they've got on privileges. For older kids, the classic Monopoly game can help teach basic money handling skills in a fun way.
When kids see parents stressed and upset about money, they might learn the wrong lessons. Money is important, but it's not the most important thing in the world. Managed well, it serves its purpose, which is providing the security that's necessary for a safe, responsible, and comfortable life.
Kids can be more engaged than you think when it comes to finances.
Allow Kids to Learn
It's tempting to provide a cushion that won't let kids fail, but that's counterproductive. Let them learn, sometimes the hard way, what it takes to manage money. If your son wants to buy the latest and greatest toy, you can advise him about how much it costs, whether he has enough money saved, and how much he'll have left after buying the toy. Show him options, such as a less expensive toy or shopping around for a better price. But leave the decision up to him.
Visual aids help. One Money Crashers approach uses a chart on the wall. When your child wants to buy something, that becomes a goal. Mark the goal on the chart, and lets your child watch as his allowance money grows enough to buy it. He might decide he wants more money, which opens a new conversation about earning.
Money doesn't have to be mysterious, and it shouldn't flow like water. The sooner kids start learning a healthy respect for finances, the better prepared they'll be as adults.
Mint.com can help you prepare and stick to family budget that reduces your stress, too. With many financial options, including mobile access, your kids can watch how simple it is to keep finances in check.
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Carole Oldroyd is a freelance writer who helps families develop and stick to a budget.