As parents, we have to teach our kids so many things, and as they get older, we realize a lot of what they learn, we don’t even realize we’re teaching them… they’re learning by watching us! If we have good habits, then that’s great, but if we don’t have the best habits, we could be teaching them things we realy don’t want to be. An example? If we’re trying to teach them about exercise and nutrition, but they never see us exercise, and all we eat is junk food, our kids are going to pay more attention to what they see us doing than what we tell them to do. The same can be said for financial habits; if our kids see us making smart money decisions, they’ll learn those good habits, too! Here’s my list of 8 things to teach your kids about money, things we can be explaining to them as we do them…
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When my oldest daughter was little, she’d ask for something, and I’d tell her I didn’t have the money for it… then one day she said, “Just go get some from the ATM!” This was the perfect time to teach her that the money from an ATM isn’t “free,” it’s money I have in the bank. So if I don’t have money in my bank, the ATM won’t give me any.
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If your kids see you using credit cards for everything, they’ll think it’s normal and acceptable to do the same themselves. If you’re using a credit card to save points for a reward, explain that to them, and let them see you writing a check to pay the credit card company. Also be sure to show them the statement, so they can see the interest, and how it adds up to real dollars and cents.
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If you never use cash, ever, then your kids might think it’s not a good idea, and sometimes, it’s the best way to pay. Let them see you use cash, and better yet, let THEM pay for things with cash!
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Most of us didn’t see our parents paying bills, or balancing their checkbooks, so we had to learn about these things in an abstract way in an economics class, or worse, the hard way by doing it ourselves. Let your kids see you paying bills, and explain to them what you’re doing, and why. If you have a budget, let them see that, too, and see how paying the utility bill and cell phone bill fit into it.
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If your kids don’t understand why you go to work (to get paid), they might not make that connection on their own. If it’s possible, when they ask for a big-ticket item, show them how many hours you have to work to pay for it, and figure out how many days of work that amounts to.
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In item 2, I said it was a bad idea to use credit cards all the time. If you use a debit card for most purchases, explain the difference between that and a credit card. Explain that it comes out of oyur checking account, and let them see you enter that amount into your checkbook.
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If your children don’t see you pay bills, or know how a monthly budget works, they might not understand financial priorities, like paying mortgage or rent first, then utilities, then car payment, then groceries, then savings, then fun money. This is lesson they can learn early, and the earlier they learn it, the more natural it will seem when they need to start prioritizing their own spending.
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If you never let your children see you NOT purchase an item you want, they might get the idea that you, and they, can always get what they want, when they want, without having to wait for a sale, or for you or them to save the money. If they ask for an item, help them save for it, and let them know when they have the money for it… More Sillybandz? Sure, once you have enough saved… it won’t kill you to wait…
All of these lessons about money are so important for our kids to learn, and the best way for them to learn them is to see you doing them yourself! Which of these money lessons have you taught your kids? Are there others you think are important, too? Please let me know!
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