Kids and Financial Responsibility
Financial responsibility is an important skill for kids to learn and develop so they can successfully handle the various financial situations they will face as adults. Doug Lockwood, a certified financial planner, writing in the October 2010 U.S. News and World Report, explains that teaching kids how to responsibly manage money is one of the most important requirements of good parents.
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Background
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Regardless of other economic issues in the United States, Lockwood argues that much of the financial trouble that produced the most recent recession stems from poor debt and spending behaviors by many individuals. He suggests it is not only for the benefit of our children that we teach them money management, but also for the betterment of society.
Basics
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Jackie Beck, a more than four-year veteran of personal finance writing, advises parents to start early in teaching kids basic money skills. She suggests that parents give kids a modest allowance when they are young to begin practicing the balance of spending, saving, and giving. Other financial experts agree that "practice money" is a good way to start with young kids.
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Jobs
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As kids get older, they can add extra chores and outside jobs to earn more income. According to the "Money Talks" teen financial training curriculum created by a team of University of California Cooperative Extension advisers, teenagers want to learn and understand more about financial responsibility as they transition into adulthood. By getting a job, teens learn how to track spending, save for a car or home, and become familiar with insurance matters.
Role Model
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One of the best ways you can help your kids understand financial responsibility is to model it for them. Kids tend to gravitate toward a similar concept of debt and spending as their parents demonstrate. Take your kids to the store with you and show them how to compare value, to consider sale prices and discounts, to use coupons when available, and to research high-priced items.
Considerations
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Demonstrating good spending habits is important, but teaching your kids how to save is also necessary. Young kids can start with a piggy bank and eventually grow into a savings account with deposits from a portion of allowance and job earnings. Lockwood also strongly believes parents need to show kids the value of community and teach personal giving to church, charities, or other social organizations. This creates selflessness and helps kids better appreciate what they have.
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References
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