We all agree that the year 2010 was one of the most difficult in terms of financial hardships, and we can’t wait for the year to be over. But as we usher in a new year, lets not repeat the same mistakes we made in the year 2010 in 2011. Although most experts agree that another financial catastrophe will definitely happen again sometime in the future, because apparently human beings have a very short memory span, and they never seem to learn from their mistakes, that doesn’t mean you are going to sit down, do nothing and hope for the best. I know as a parent, the last thing you want your kids to go through is what is happening in your financial affairs right now. The best way to protect kids from ever repeating the same financial mistakes we’re going through, is by educating them on the benefits of financial management skills, as is explained in the following article by Richard MacGrueber.
If you have ever struggled with your own money management issues, you probably know how difficult it can be to deal with personal finance issues. If you have made it to the light at the end of the tunnel, and have been able to overcome financial problems, you also know how much easier it is to get through your day-to-day life without worrying about money. If you do not want your children to deal with same financial burdens you have struggled with, it is wise to teach them the importance of good money management skills.
Just as you teach your children other good habits, such as brushing their teeth and cleaning up after themselves, you can also teach them good money management habits. The most important is teaching your children the value of saving money, and not spending their savings on an impulse.
Give your children the opportunity to save money by rewarding them with an allowance or monetary value for completing tasks outside the realm of their regular responsibilities. To teach children the connection between spending and saving, do not try to dictate how they handle their money. Allow them to spend or save at their discretion. If you know your child wants to purchase a new video game, but he or she wants to spend their money on a bucket full of candy, you can remind your child that if the money is spent it will take longer to reach their goal of getting the video game. Teach them, but don’t tell them what to do.
Practice What You Preach
Although you may have the best intentions when it comes to teaching your children good money management skills, they will not reap the benefits of your efforts unless you are also managing your own money wisely. If your children see you constantly purchasing unnecessary items or overspending, when you tell them how important it is to save their money – the advice will fall on deaf ears. The old saying “do as I say, not as I do” will not work when it comes to teaching children the value of good money management skills. If, on the other hand, your children see you working hard to save money and successfully reaching financial goals, they will be more inclined to follow in your footsteps.
Family Savings Goals
You can even set family savings goals together for fun. If you set a savings goal of a certain amount to reach in a set timeframe to take a family vacation, work with your child to save for a goal within the same timeframe. Your child can set a goal and save so that he or she will have spending money of their own while on the vacation, or for some other item to be used on the vacation. Whatever the family goal is, working together towards a financial goal can be fun and rewarding, and can bring the family together.