Teach your Children about Money

Teach your Children about Money

This article appeared in The Lima News.

Uncertainties in the job and financial markets make it imperative for parents to teach their children how to manage money wisely, beginning at an early age.

A small allowance should be implemented around the age of six. This allowance should be unconditional and must not be tied to doing chores, for children should learn that certain tasks need to be done regardless. However, children may be given the opportunity to earn more than their basic allowance for completing additional work. The weekly allowance should be increased annually, and as children age, this increase can be tied into things they must assume responsibility for purchasing such as dates, entertainment, snacks, special clothes, etc.

When children become teenagers, start discussing longer term goals such as college. As an incentive for children to save for the long term, consider matching amounts they contribute to their savings account. Begin including them in family budget discussions. Encourage children to get jobs so they can appreciate the work involved in earning money. By age 18, children should be able to manage a year's expenses and be capable of saving for higher cost items.

Throughout this educational process, be supportive and try to avoid the tendency to criticize or control what your children do with their discretionary spending money. Teaching your children how to manage money may be one of the most important lessons you can give them.