Author: Alan Brady
Published: Apr 24 2013
The most important job of any parent is to prepare their children to enter the world as responsible, contributing members of society, and one of the hardest things about being a responsible adult is managing money and debt. Here are some simple tips to help you instill good money management techniques in your children that should stick with them for the rest of their lives, and to helping them recover when they’ve made their first few financial mistakes.
Giving your children an allowance in exchange for chores and good behavior can be useful because it creates an obvious connection between money and productivity. They will learn quickly that the amount of money they have to spend is tied to the amount of work they’re willing to do. Knowing that you’ll have to sacrifice more time with your loved ones in order to earn more money is a great motivator for hanging on to what you have just a little tighter.
Taking your children down to the bank to start up a savings account is also a great place to start. Turning the process of saving into a game that you can play together will teach them the importance of actively monitoring their finances. Setting time aside for a regularly scheduled discussion and review can also help to remove any taboo from the topic of money, which will be important later, when your child makes their first few financial mistakes.
The convenience of credit and debit cards is important for any adult, but early on it can be very useful to establish a cash only rule for your child’s spending. This will help to avoid the “casino effect” by allow the spender to watch their funds being depleted.
It may sound strange, but teaching your children the value of giving can have a very positive effect as well. By teaching them gratitude for what they have and compassion for the less fortunate you can help them to distinguish between need and want.
As your child moves into junior high and high school, give them an opportunity to invest some of the money they have saved. This will help them to understand the vagaries of the market before they begin to risk anything they can’t live without.
Difficult as it may be, one of the most important things you can do for your children is to let them make their own financial decisions, especially their own mistakes. The consequences of their errors will be so much easier to bear early in their lives, with you there to guide them through the process of credit recovery.
Your child’s credit score is nothing to take lightly, but they do have one very real advantage over you: they’re young. They will have time to fix their credit before they have to be completely independent. Ensure that they understand exactly which choices landed them into trouble, as well as the consequences they’ll face later if they’ve damaged their credit too badly. Finding a reliable loan modification lawyer will help to make sure that they aren’t being taken advantage of by predatory lenders.
By making money management a normal part of daily life while your child is still young, you’ll be helping them to avoid some of the most common and devastating pitfalls ahead of them, and teaching them never to take their eyes off the financial ball. In college when their friends are constantly ignoring collections calls and they’re the only person they know with good credit they will thank you.
Alan Brady is a writer who uses personal experience as inspiration to write about family, law, and business practices. He currently writes for attorneys.com which locates local loan modification lawyers and other legal representation.
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