by Heidi Peaster

Created on: April 20, 2010   Last Updated: April 21, 2010

In days past, we decided that to give our kids all the things that we wished our old-fashioned parents denied us was the way to go.  Now, we are beginning to see that maybe our parents weren’t so stingy as we thought they were, and that maybe there was some value in our kids learning delayed gratification and the value of a dollar.

Here are some tips on how to teach our children these skills.

* Don’t give the kids everything.   Let them learn that just because Johnny down the street has everything that’s hot doesn’t mean that it’s necessarily the best thing.

* Give the kids an allowance.  Some people say give them an allowance just because they are breathing the air, some people say make the kids do chores for it.  There are valid reasons for each, but the main thing is that the kids begin to learn about cash flow. 

* Get the kids to divide up their allowance into separate envelopes.  If you believe in getting your kids to give to the church, have one envelope marked:  God’s money.  Let them put their offering in this one first.

* Mark the next envelope: Savings.  This is where they put money aside for something big that they may want to save for.  If they don’t know what that might be right now, let them save anyway.  They’ll think of something, or if you are very lucky, your child might just decide that saving for saving’s sake is more fun.

* Let the kids spend what is left over on anything they want.  Let them know that it is their money, then let them know that when it’s gone, it’s gone until allowance time comes around again.  Then, if they blow it all on something that you know is ridiculous, they will learn it firsthand.  And they will believe it.

* As the kids get older, sit them down with you when you pay the bills.  Show them where the money you earn goes, how to balance a check book, how to bank on line if that is what you do.  It will be a chore for them to do this with you, but it is necessary.

Show them also how much interest the credit cards cost you each month.  Let them see how the balance owed on the car goes down, or when you charge something, how the balance on the card goes up.

* Start a checking account for your teenagers.  This sounds like a scary proposition, but, if they bounce a check, take the checkbook away until they work off the fees.  Explain the consequences of overdrawing well ahead of time.  Go over their checkbook with them once a week until you know for sure just what their spending habits are.   

What you don’t want to have happen is for your kids to go off to their first apartment and not even know how to write a check.  As much trouble as it is, teaching them the workings of a family budget will help them not only learn to live independently, it will keep them living that way.

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