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When Should You Start To Teach Your Children About Finances?

March 16, 2011

When I think about how kids grow up these days versus how I did, one of the big differences I see is in the amount of stuff they have. Don’t get me wrong, being the only girl allowed for a lot of Barbie’s, stuffed animals and dress-up clothes, but it doesn’t quite compare to the PlayStations and mini motorized motorcycles today. Many of the toys I played with were hand me downs or bought from flea markets. My parents weren’t running to FAO Schwarz to pay a hundred bucks for a stuffed animal they could get for $5 at the local thrift shop, and I totally understand that. So I wonder, how do you teach kids to recognize the value of a dollar? According to an article I read on MSN Money.com, things like openly discussing finances and adjusting their allowances are the way to go. Jen Smith, aka the “Millionaire Mommy Next Door”, a financial coach suggested making weekly events out of family financial discussions with “Money Mondays and Family Finance Fridays.” Jen Smith said to make it fun by, “holding the meeting in a tent with a batch of fresh baked cookies.” A little camping and some chocolate chip cookies will make the devastating news that your family is headed for bankruptcy a little easier on the toddlers I guess. Let’s get real here, finances are a serious matter and some things should be best discussed between mom and dad only. Yes, it’s good to let your kids know that some things in life are too expensive but do you really think your kid has any idea what a 401k and mortgage payments are? The only things they are excited about are the warm cookies and chance to sleep in the yard.

Another suggestion was that “school-aged children (be) allowed to pay for things like lunches, clothes, class photos, schoolbooks” from their allowance. Okay so let me get this straight, I do chores to earn my allowance to then in turn use that money to pay for food and clothing. Isn’t that the parent’s job? The financial coach continues to suggest that, “If they spend all of their allowance on movies and popcorn and have to wear the same two outfits to school all month, so be it.” So who covers the therapy and medical bills from all the beatings and harassment that kid will get at school for being forced to wear the same outfit for a month? Or will that come out of their allowance too? I grew up always knowing that money doesn’t grow on trees and that finances are important, but not because my mom forced me to pay for my own lunch at 10. I learned it from seeing how my parents spent their money.

I understand wanting to teach your children to grow up to be a responsible adult, but slapping a suit on them and dropping them off at Wall St, diapers in hand, isn’t exactly the way to go. Children learn get their habits from watching their parents. Don’t want them to think its okay to leave beyond their means? Then make sure you aren’t doing it either. By being a financially responsible parent, you are setting an example for what your child should strive to be like. Please remember that your child is just that, a child. Let them be a kid and enjoy their allowance. Spending it on ice cream or playing cards every now and then isn’t going to doom them to a life of debt. Adulthood isn’t all it’s cracked up to be, so don’t rush responsibility on your child. At least wait until high school.

Here at GAI (www.gunwel.com) we would love to know what you think it means to be a financially responsible parent. How do you keep the costs down at your house? Let us help you make sure you get the most of your money by handling all your tax and financial needs. Our staff is here Monday-Friday 8am-8pm and Saturdays 8am-5pm so feel free to stop by! Give us a call at 212-979-6830 with any questions or comments, we look forward to hearing from you

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One Comment leave one →
  1. January 12, 2012 5:14 pm

    So nice article! Thanks for sharing.

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