Children learn what they know. It is as simple as that. When kids are growing up they are watching their parents, and will reflect their parents’ values and beliefs – good and bad. One of the most important things you can teach them is how to manage their money. Talk to you kids about money, let them know how it works and where it goes. Look at how you spend your own money, and make adjustments that you would want them to learn.
When they are still young, open a savings account for each of your children. Teach them how it works; show them how their money can grow by putting away money that they get as gifts, etc. Show them how to save. Teach them how to put money away, and not spend it all on the first thing they see. Show them how you spend money, and where you don’t. It is just as important for them to see what you do buy, as it is for them to see what you forgo so as to buy the things you do. When they get a little older, teach them the dangers of credit, and how to use it wisely.
If you have a mortgage, show them that. Let them know that you are in debt, but the good kind of debt. Show them how important it is to pay that debt, and to pay it on time. The more you teach them the savvier they will be when it comes time to make their own debt choices. ■
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