Do your children actually see you spending money? Do they see your paycheck? Do they go to the bank with you to deposit it and then get cash back for your needs? Do they see your bills? Do they watch you pay them? Do they know you have an IRA from work? Are they aware that you have a Savings Account?
I am thinking that in our electronic world today, those items I questioned you about might all be handled electronically, out of the view of your children. Because of that, your children don’t have the same opportunity previous generations who could physically see the money and could use what they saw to conceptualize it’s handling. And if you are using electronics to manage your money, buy some play money to teach your children how money should be handled. You could use some physical examples with the play money. You might use a very simple tool: boxes or envelopes.
The “In” box is where your paycheck play money goes. Do have a discussion with your kids and teach them the concept of budgeting. The “Budget” boxes have to be several: Bills, Saving, Education, Clothing, Investment, Charitable Contributions, Fun, Food, and Transportation. Of course, those are just a few of the Budget Boxes you might want, so feel free to add and subtract as you like.
Let them know the rules you’ve set. Saving, for example, might always be 10%. Education funds might go into an educational IRA. Food might be a set amount each week. If you use coupons or find specials, let them see how the weekly leftovers can be moved into another Budget box to increase the stash there.
When your children are very small, you do the sifting and sorting of play dollars to go from the In box to the other boxes. Explain it to them as you do it. As they get older, let them begin to handle the play dollars. They will be able to see in a very short time how monies are accrued or depleted.
Once your children have learned how you handle your money, let them set up a similar method to handle their own. If they get a weekly allowance, use it to teach them. If they receive money from gifting, play the little boxes game with it until they can visualize it without the boxes. Graduate them to electronics, but by then, they’ll have learned the systems and the basics and will be able to handle money easily throughout their lives. They’ll thank you for it.
Len :: May.01.2009 ::
General ::
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