Teaching Children About Money

Article by Rob Willis

As a parent, one of our greatest responsibilities is Teaching Children about Money, the value of money and spending it wisely.I have three children, the oldest of which does not understand the value of money. If he had $10, he would think “What can I afford?’ where my younger two kids would think, “If I buy that for $7, I would only have $3 left.” Same family, bought up the same way, but entirely different mindsets.

So what is it that causes them to think so differently and how can we as parents start teaching children about money?

One of the most common suggestions is to teach by example, which is very valuable advice. However if we ourselves are not great money managers, then we would need to start with ourselves in understanding money management, which is very important in itself.

Teaching children about money needs to be done in such a way that our kids learn not simply how to make money, but I believe they first need to understand the value of money & how to save and spend it wisely.

If we simply teach kids to make money, this does not help if they do not have a healthy financial understanding. If you teach a child to make money first, he is simply going to buy more stuff. However if you start with teaching children about money, they will have a better understanding of the value of money, and how to save & spend it wisely.

Too many people tend to put the cart before the horse & get this around the wrong way, or think that teaching children about money is the same as teaching our kids to earn money. It is not. Earning money & learning about money are two polar opposites.

Simply look at many adults who have great jobs, earn lots of money, but are always in debt because we tend to spend more than we earn. We have developed very bad money habits, and without the right direction & help of financial planners, we end up being stuck in the rut of financial ruin.

This is why we need to start teaching children about money almost as soon as they begin counting. However it is not too late to teach teens about money either. In fact as parents we owe it to our children to teach ourselves about money also.

So as you can see teaching children about money while they are young, can help to set them on the road to financial security. If we can develop good money habits in our children now, they will be in a far better position to make correct financial decisions as they get older, such as delayed gratification, ie not getting into debt to simply buy a luxury item.

So start teaching children about money today to save them un-necessary grief in the future.