How well did your parents teach you about money?
As a parent, sometimes I struggle with finding the best way to teach my kids (ages 15, 12, and 7) about money.
- Should I lay down the law and tell them when they can spend their money, make good decisions for them, and keep them from making costly mistakes?
- Or should I let them spend their money on whatever they want, even if it's junk I know they'll regret buying before long, and let them learn "the hard way"?
Whenever they earn money or get money from a birthday, we do make them put about half of it in their bank accounts. So they are not given the freedom to blow it all.
But I never took the time to write down a "kids lesson plan" for handling money. As the kids get older these lessons become more important (and harder for us to explain). I always had an idea how I wanted to teach the kids about money. But darn it, I never wrote down these lessons for all to see.
So I'm doing it now. Here kids, is the "lesson plan" that you should follow for handling your money:
- Don't spend what you don't have. Credit cards are very convenient. But they make it WAY too easy to spend money you don't actually have. And before long, BINGO - you're in debt!
- And don't buy what you don't need. Much easier said than done. Because, everything we want "we really need, Dad, come one." So write out a "wish list", and when you have enough money to buy something on your list, cross it off and then start saving for the next one.
- Need more money? Then find a way to make more. Simple. Get a job. Sell stuff. Beg. Borrow. Whatever it takes (legally, of course)
- Saving is important. Do it regularly. And have it done automatically, if you can (like being deducted automatically from your paycheck). Save as much as you can. And don't stop just because life gets tough - or you'll have a tough time starting up again later.
- How you save is even more important. Don't do anything too risky, unless you can afford to lose the money. Just ask Bernie Madoff's clients!
- Following your dream is great - but it doesn't always pay the bills. So dream big. But don't let yourself go broke while you're doing it.
- Learn how to shop around and compare prices. It's easy these days, just hop on your computer, do a little research, or check out Craigslist and eBay. And find the cheapest price for whatever it is you want.
That's it. Hope these lessons help you become wealthy!
P.S. And make sure to give back to others less fortunate than you are whenever you can! Like they say, "what comes around goes around!"
And thanks to Green Panda Treehouse for including us in last week's carnival!
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