Teaching Financial Responsibility to Your Kids
This week on Wire Talk, Sunny and I were answering questions from moms all about family finances and how to instill responsibility in our kids when it comes to money. Here are a few things we’ve worked to teach our kids over the years that I think have served them well as they’ve entered adulthood:
Money is finite.
When Greg and I first got married, I really had no clue about money! My parents didn’t say no to me often - if I wanted something growing up, mom or dad would get it for me. Not only did I not know how to do a budget, I truly had no concept of money. When I would tell Greg I wanted something, and he said we couldn’t afford it, I just thought he was being mean! It took years, but I learned that credit card bills come due eventually and that having a budget brought peace to our marriage. By elementary age and older I think it’s fine to share about your family’s finances with your kids. I know after Greg and I read Dave Ramsey’s book, we sat all the children down, we told them we were going to get out of debt, save money and stop eating out so much. We went to the cash system and honestly, because of our conversation, the children accepted it and helped by not arguing to go out all the time. It was a game changer!
Kids should have some skin in the game when they want a big ticket item.
I remember one year growing up Abby wanted an ipad for Christmas, which was NOT in the budget. I told her it wasn’t happening and you know what she did? She saved and saved her babysitting job money and bought it for herself! I can tell you for sure that she took better care of that iPad because she worked so hard to earn it - she still uses it to this day.
We also made each of our children pay us $1000 when it came time to start driving the family car. This went toward gas and insurance and helped them feel a sense of responsibility when they were driving. Don’t deny your child the opportunity to work hard toward something they want - it’s great for them to see how rewarding hard work can be!
Get comfortable saying no.
Moms, this is something we have got to learn! Toddlers need to hear no, elementary age kids need to hear no, and teenagers definitely need to hear, “no,” at times too. If you are finding that your child takes things for granted, you need to stop giving your child so much. If necessary, have a family meeting with your child/children and let them know, “Hey, - Mom (or Mom and Dad) has not done a great job at teaching you how to appreciate money and the things that you have been given. I have created this problem, so here’s what I am going to do about it, and here’s how you are going to be affected.” It may take a while to see a change of heart in your child, but be consistent and they will adjust!
Above all, don’t be afraid to talk about money with your children, the more you do the better they will be able to handle it in the future!