Kids and Money

How do you teach your child to learn how to manage money when we are in a time when it seems that debt is at an all time high? Kids are fascinated by money and so are we.

Parents themselves are having trouble learning to budget and spend money so how are we supposed to teach our children? After all, it does enable us to buy homes, cars, food and clothing. But we can get carried away unless we learn the difference between what we need and want.

There seems to always be so many piles for our money. There is the need pile, the want pile, the give pile and save pile. But these piles are not at all equal and we, as a society have started to confuse what piles are the most important.

We are entering a time when most kids are not taught the power of money or how to harness it. A recent study showed that most graduating high school seniors fail a financial money literacy quiz about the simplest budgeting ideas and check book balancing. What will happen if we don’t correct this? We will continue to raise generations of people that can’t turn today’s pennies into tomorrow’s dollars.

USA Today reports that 19% of Americans between the ages of 18 and 24 declared bankruptcy in 2001. The fastest growing group of bankruptcy filers are those who are 25 years of age or younger stated a Senate Committee on Banking, Housing and Urban Affairs, 2002. Dave Ramsey, the creator and teacher of “Total Money Makeover” and popular radio show host, says that these statistics show that many children and teenagers are not being taught how to handle money. Young people should learn by trail and error when their mistakes will not cost a family something of such importance such as a home or credit card debit that could lead to bankruptcy or foreclosure.

Allowances are a great way to learn without falling victim to such tragedy.

Four wonderful websites that I have found to help families with this task are Moonjar.com, kidsfinance.com, daveramsey.com and teachersandfamilies.com.

Moonjar.com and teachersandfamilies.com focuses on allowances and how to make money goals and spending limits. When to start an allowance, how much to give and for what chores to earn an allowance may differ from family to family, but it will get you started on a track. Kidsfinance.com and daveramsey.com has money management books for children very young with games and activities and characters to help them understand finance.

Whether you want to child to start piling up the money to save, give or spend or just learn about who is on what bill and the story behind the currency that we use, please start today talking about money to them. When my kids were 3 or 4 years of age – they already knew that money came out of a machine, Sonic took cards that we slide in a slot and the tooth fairy could carry coins as well as bills.

What legacy will you leave behind? Start today for a brighter future – your children are watching you – what are you teaching them?