In days gone by, personal finance skills were taught in school. The courses went by the wayside
as other subjects were deemed more important. An example is algebra, which is a required
course, but one that few students use after leaving school. Be advised that youngsters tend to
emulate the financial attitudes of their parents and good financial habits can be learned.
Begin in Childhood
Parents shouldn’t be afraid to discuss money matters in front of the children. The age of 7 is a
good time to begin financial education by teaching children good spending habits. Young
children can be given a weekly amount, while teens can receive an amount at 2-week intervals.
It’s a good idea to tie the stipend to chores to encourage a work ethic.
The ability to save money rather than spending it for instant gratification is one of the best
lessons a child can learn. If the youngster wants something specific, suggest they save a portion
of their funds until they have the required amount.
The opportunity to earn extra money provides children with more control over how they earn,
save and spend. It also teaches a work ethic.
Introduce children to the concept of philanthropy. Parents that give to charitable endeavors
should take their children with them when they contribute and talk about why they’re giving
back to the community.
It’s difficult for parents to see their children want something and struggle to achieve it. Resist
the temptation to give youngsters extra money before the allotted time. The negative
consequences of being careless with their money is a strong and powerful lesson. Be sure to
discuss spending habits with children and ways they can do better in the future.
The early foundation for budgeting as a child will help teens. Show them how to create a
budget that accounts for the things they need vs things they want. It’s a lesson in prioritization.
It’s equally important to discuss the pitfalls of high-interest student loans and credit card debt,
along with paying bills on time, as youngsters mature into adults.