Teaching Children About Money – 6 Rules

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For better or for worse, the bonding experience among many of today’s teen boys is video games.

As a father of a teenage son, I have many opportunities to “transport” my son from activity to activity. On one such occasion a I was taking my son and some of his friends home following an evening of video game play.

Of course, the talk in the car quickly turned to “gaming.” I found myself eavesdropping on what turned out to be some thought provoking gossip, which started when one of the boys said:

“You know what John (not his name) told me that he did? He got so mad the other day playing that he threw his controller across the room.”

(Note: For the uninitiated, games are controlled through plastic handheld “controllers.” The buttons and knobs on the “controller” control the action on the television screen. The discussion continued with a startled reaction…)

“You’re kidding!”

“Yeah. He said it flew apart. He said it was no big deal.”

Now, a game controller is a valued item — the words “it was no big deal” hung in the air. There was a disbelieving silence in the car.

My son’s friend continued the story: “Yeah. He didn’t care. He said a new controller was only fifty bucks.

Then all the boys laughed, shaking their heads at the “it’s only fifty bucks” comment.

As a Dad, I was happy to hear the shocked silence. I was even happier to hear the laughter. Obviously, John had a sense of entitlement that these boys evidently did not share.

But this raises an important issue: As parents, how do we teach children about money? How to place money in perspective? How about teaching the virtues and hazards of debt?

Although I am still trying — and far from perfect — here are a few suggestions:

  • Give an allowance. I can’t think of a better way to train your children to budget than to give them an allowance. By providing them with funds you can encourage them to save up for what they want. In fact, the true purpose of giving an allowance is never to transfer wealth, but to encourage thrift and budgeting.
  • But don’t give away the store. My community has many affluent families. When I sometimes pick up my children from the local high school, I often see some of their rich classmates roar out of the student parking lot in BMWs, Mercedes, and other expensive vehicles.
    Dumping vast sums of discretionary funds into a teen’s pocket is absurd. It also teaches a poor lesson.
  • Coordinate with your spouse. To the extent possible coordinate money related issues with your spouse. Sending mixed messages or undermining one another defeats important lessons on savings and debt.
    Note, however: Because spouses frequently come into marriage with very different (and sometimes distorted) attitudes about credit and savings themselves, absolute coordination is not always possible. As with all parenting issues you sometimes must simply do the best you can under the circumstances.
  • Upon your child’s entry into college, obtain a low limit credit card for him or her. This may seem to be a contradiction, but it isn’t! Debt is a part of modern adult life. Experiencing debt is an excellent way of learning to use it.
    Also, don’t forget to open a checking account.
  • Attend a house of worship with your child. This may seem like a “left field” suggestion — one which my atheist and agnostic friends would disagree with. However, relying solely upon material things quite often creates (not surprisingly) a … materialist! Reminding your children that life is much more than “things” is the absolute best lesson you can teach — ever.
  • Encourage your child give to charity. There is always someone more needy, which is an important lesson in itself.

As in all cases, parenting is a hit and miss proposition. However, using these important lessons should help to foster lifelong, beneficial attitudes and habits on the part of your children.

Someday, they may even thank you.

Source by Larry Stratton

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