Does dad know best about money?
According to a recent survey by Quest Business Agency and Money Management International, 43 percent of men name the “school of hard knocks” as their primary teachers of financial habits. Unfortunately, these men did not mention their parents, as their main resource for financial help. This statistic rings true with many families across the U.S., as parents today find that teaching their children about money is challenging at best.
As with any difficult and necessary task, the earlier you get started, the more effective your influence. Allowing children to make financial mistakes while they are young is much safer than sending them out to learn from the school of hard knocks once they enter college or even the workforce.
This Father’s Day, make a pledge to address this important life skill. Rearing a financially independent child could be the best gift you ever gave yourself, and your child. The following are some tips from Money Management International that will help your children start off on the right foot financially:
• Involve them in financial planning. While a young child won’t understand investing at the complex level of an adult, a savings account in his or her name will help them understand the benefits of saving money and watching it grow.
• Give your child a chance to be in control. If you give your child an allowance, let him or her be in charge of spending it. This is a great way to teach the relationship between their actions and the positive or negative consequences that follow. You may be surprised at how quickly, or slowly, your child chooses to spend his or her money.
• Provide extra income opportunities. Help them learn that money is something that is earned, not something to which they are entitled. Set up a list of chores and give them dollar values based upon level of time commitment or difficulty of the task. This is a great way to teach children about the value of hard work.
• Take your child shopping with you. Explain why you make certain decisions while shopping, whether you are searching for a new car or some yard tools. By showing them the details you take into consideration, you’re teaching them to be a wise consumer.
Finally, examine your own spending habits. It is extremely important that you are practicing what you preach, as your children learn more from actions than words. Most importantly, don’t forget that mistakes are part of the learning process.
•Tommye White is the Director of Counseling for the Consumer Credit Counseling Service (CCCS), a division of Money Management International. CCCS toll-free number is 1-800-873-2227 and its Web site is www.moneymanagement.org.