Monday, 27 May 2013

How to Teach Children Money Management

Money is important. It is the currency by which the world works. It governs everything we do and our lives, or our successes in life, are often determined by money, or lack of it. 

I don't believe that money can make you happy, I don't believe it is the most important thing in life, and I think that constantly striving for more money leads to much dis-satisfaction. But I do passionately believe that God wants to bless us, and like any parent, he wants us to live well, be secure and to have everything we need. 

As money is so important, it astounds me how little we are educated about it. I do not recall ever having a lesson at school on how to draw up a budget, how to stick to it, or even how important it is to have a good attitude towards finances. It is up to us, as parents, to teach our kids these life skills. So I was wondering, do you teach your kids about money? What age do you think is appropriate to start? How do you do it in an age-appropriate manner? And do your kids have to work for their money?

I came across this post by Michael Nichols about how he has taught his eight-year old daughter about money. In doing so, she has learnt to save, give, budget, work and spend in a very real way and even at the tender age of eight she is setting herself up for a very secure future. I was impressed!

Now Ruby's a bit young to understand, well, anything, but it got me thinking about how I would like to educate her in this area in the future. I figure if we think about it now, then we'll be ready as soon as the opportunity arises. 

I'm sure as the next few years go by I'll firm up my ideas on how I want to teach Ruby about money and I think Michael's article outlines a brilliant framework to adapt and work with. But in the mean time it's good to be thinking about what I want her to learn about money and how that shapes her character.

I want Ruby to grow up to:
1. Be generous - giving to God and also to those less fortunate, as well as just because she wants to bless somebody
2. Be a saver - to know the importance of putting money aside for a rainy day as well as saving for specific items
3. Be patient - to be able to avoid impulse purchases
4. Be secure - to make purchases because she loves or needs a specific item, not as a comfort or just spending for the sake of it
5. Be a budgeter - to know where her money is going and to be able to see where she can cut back if necessary
6. Be debt free - to not need to borrow money unnecessarily
7. Be a hard worker - to have a good work ethic and to be able to see that by working hard she reaps rewards from that

How do you teach your children money management? Any tips?

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