Money Lessons For Kids

Children become more aware of money as they grow older. Fortunately, they also start to develop an awareness that it’s smart to save and to shop carefully.

The current economic downturn is a perfect time to promote these life lessons. According to Eric Tyson, author of Personal Finance for Dummies, you shouldn’t feel guilty if you do not want to buy your kid a video game system. Don’t feel guilty at all. In fact, Tyson says this is a great time to instill important financial lessons, including that budgeting really works.

It’s all about financial realities. Tyson says that kids are aware of what is going on. As a result, they probably already know that times are more difficult for their parents as well. Tyson believes that the economic crisis provides a great environment to teach kids some important financial life lessons.

He admonishes parents to always tell kids the truth. They already sense what is going on. Why allow them to wonder what is going in with the family’s finances? Bringing them in to the process empowers them to know why certain aspects of the family lifestyle have been cut back.

Parents will quickly find out that their kids don’t have a very good understanding of what is going on financially. He advises taking them on a “money tour” around the house. They will also learn valuable lessons about conservation and how it enables the family to save money. Tyson says it’s also useful to show them the amounts on bills that might pile up each month. It’s a reality check that is hard to escape.

Children learn quickly. But parents need to remember that they are their children’s most influential mentors. Extravagant spending on the part of parents is a bad lesson, because it is perceived by the kids as normal behavior.

Tyson also advises starting an allowance. It’s an excellent teaching tool that emulates realistic money matters faced by their parents every day.

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Posted by: Geoff Caplan

LeadFlash

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