An article on teaching kids about money management so they don't make our mistakes

Parent advice blog Urban Moms posted an article by Rob Stringer, "an award-winning educator and Parenting & Youth Coach," titled "Teaching Kids About Money Makes Good Cents". This how-to article lists some very practical, very easy ways to teach children about money management. The tips are basic helping to bridge the gap between what they are taught in the classroom and their handling of money in real life situations. Some of my favorite tips include:

"When giving an allowance, try giving it in denominations that encourage saving. For example, instead of giving a $5.00 bill, offer two toonies and a loonie and encourage $1.00 to be put aside for savings." We do this with our 9 year old son. He has a "save it" can which he places two dollars into each week for a future something and a "spend it" can for him to waste at his discretion. Putting into place an allowance has cut down on him constantly asking us to buy him things and has make him very aware of how he chooses to spend his money deciphering between things he really wants and impulse buys. Ad I must say he's rather frugal. Plus we don't feel guilty anymore when we have to say "no" all the time. Now we just say, "If you want to spend your own money you can have that piece of crap that will be forgotten about in less than a day." Well, we don't say exactly that, but you get the idea. And funny enough, because it's his money he'd have to spend the items usually stay in the store. This piggy bank is an excellent tool for kids to see their money grow.

"Consider supporting others in need. Some parents also suggest their children set aside part of their allowance to support a children's charity or other worthwhile cause." We do this with our children and we let them decide who they'd like to help. With some guidance from us we research charities that interest our children. We do this because we feel our children have more of an invested interest in the charity when they feel they are helping a cause that's meaningful to them. Last year we donated part of the money we'd saved as a family to KIVA because our son really thought it was important to help people set up their businesses and was really excited about helping a farmer buy live stock for her farm in Africa. He was fascinated by the idea that our contribution was helping someone on an entirely different continent. Whatever we saved as a family in our charity box collected from a portion of our son's allowance and whatever we had in our pockets and change bowls we matched at the end of the year. Our son was thrilled to see our savings doubled.

"Teach by example. No matter what you tell your children about money, your own actions speak louder than words. Do you budget? Are you setting aside savings each month for education, retirements, or future purchases? The things your kids hear you say or do about money will have a big influence on the attitudes they form themselves."
I can't stress enough the importance of this last tip. It rings so true in my own life witnessing the differences in the ways my husband and I manage our money and how our individual upbringing has molded our feelings towards money.

Regardless of how terrible we are with money it's our job as parents to raise our children to be independent, confident adults and one of the major steps towards this goal is helping them to understand the how-to and importance of money management.

Link: Teaching kids about money management