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The Hood Magazine

Family Financial Fitness

Aug 20, 2014 12:38PM ● By Hood Magazine
By Kristi Robinson, Personal Finance Counselor, Center for Financial Education  Image title

“I think parents need to start teaching kids about the importance of managing money at an early age.” Warren Buffet

Children are sponges – they absorb whatever is around them. We need to be intentional about what surrounds them. So why aren’t we teaching our children common-sense money principles? Practically all of us teach our children things we feel most competent about. If you are an auto mechanic you will spend of lot of time and energy teaching your children about automobiles. Those who have an understanding of wealth are intentional about making sure their children know how to handle money.

Children become aware of where money comes from even before they can add or subtract. Any four year old knows his parents get money from an ATM. Understanding that the parent had to W-O-R-K for the money isn’t as easy for them to comprehend. This is a great age to start with a chore chart and paying them commission for the jobs they complete. Giving an allowance as a rule doesn’t teach children how real life works. There is a whole generation growing up thinking money is free and they are entitled to things. They expect the parents to pay the bills well into their adulthood. We are not teaching our children to work for our benefit, but for the tools and character it builds to win in the future as an adult.

The most important thing in teaching our children how to handle money is setting a wise example for them. When the parent/guardian(s) have a stable financial future, (i.e. a budget that they actually live on and an emergency fund) the health of the entire family is affected. Your kids are watching you. More is caught than taught. What you do is so much more important that what you say. So often our spending as an adult is based on our emotions – guilt, selfishness, etc. We are sending a horrible message to our children when anytime we feel bad or sad we have to buy something. Our children become a lot like us; what are we modeling for them? It is up to us to teach our children that contentment or fulfillment do not come from spending money.