Sharon Lechter, Author of Rich Dad Poor Dad, shares ideas on teaching your kids about money in her recent blog. Read on…
In today’s economy, it is more important than ever to start the conversations about money with your children before they enter their teenage years. Here are some questions to begin this conversation and encourage healthy spending habits:
* What do Mom and Dad do to earn money? Start this conversation as early as possible so your children understand that money comes from somewhere. Make sure they understand that the money you earn from what you do for a living is how you pay bills.
* What is the difference between a “want” and a “need”? For many children, anything they want in the moment instantly becomes a need. Help explain the difference between a want and a need.
* How do credit cards work? In our “just charge it” society, many children see their parents swipe credit cards for purchases but don’t see them paying the bills. When your next credit card bill comes in, review it with your children. Sharing the “paying” side of life will educate your children about both sides of the money equation — buying and paying.
* So how did that happen? I often say, “We need to allow our children to stub their toes while they are still at home, so they don’t break their legs when they leave home.” Allow your children to have money of their own…and allow them to run out of money and suffer the consequences. They may indeed have to miss that movie with their friends…but they will learn a valuable lesson. If you bail them out, they will keep making the same mistake. Challenge them to think of how they can make extra money to do what they really want to do.
* What can you do to earn extra money? This question will urge your children to think outside of the box and encourage an entrepreneurial spirit. Can they assist with something around the house to earn extra dollars? Can they provide a service that someone might need?
* Do you have a goal? Encourage your children to set little goals…and experience little wins! You will see their self esteem build as a result.
The “Money Talk” is not as terrifying as many parents think. It is as easy as talking about the things you do every day, as you do them. Your children may surprise you by how eager they are to learn! Thank you for providing your children the gift of a lifetime…financial education!