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 It's never too soon to educate our children about money. If we wait until they
are teenagers, their spending habits are already set. According to Teenage
Research Associates, older teenagers spend an average of $153 each week, 7% have
a credit card in their own name, and 18% have access to a parent's credit card.
As adults, we understand all too well the lack of magic behind a checking
account and credit card. But to young children, we may still appear to be like a
Genie who can make money appear out of thin air. Here are some ideas for
creating a more realistic, healthy view of money:
1. Credit cards are not magic. Children will have a difficult time understanding
credit limits if reality for them has been a closet full of new clothes or an
expensive video game system. As parents, we need to be more aware of how many
credit card purchases we make in front of impressionable children. One way to
take the magic out of credit cards is to pay cash for as many purchases as
possible, at least in front of the children. Save credit cards for large
purchases and private shopping trips. If that is impractical, be sure to explain
that you have to pay people back for everything that you buy. Show your child a
billing statement and point out how much you will have to pay each month for the
clothes you bought.
2. Piggy banks are a child's first introduction to the financial world, so use
them as examples of other banking practices. Check out
MoneySavvyGeneration.com. They
have created The Money Savvy Pig™, a piggy bank with four chambers, one for each
of the financial choices that children have when they earn or receive money:
Save, Spend, Donate or Invest. With this method, you give them control over the
money in their lives. In a respectful way, it asks children what they think is
the best choice and allows them to make it, thus allowing them to transact in an
adult world, your world, without feeling controlled.
3. Be at choice with money. The transparent pig allows both parents and children
to see the results of the choices made over time. This gives parents the
opportunity to discuss financial choices and their implications. Our
relationship with money is also made clear in the words we choose to use. When
telling a child that you are not going to be buying that toy he or she "just has
to have," consider an explanation that is about choosing or not choosing to
purchase, rather than one that gives the perception that we are victims of
money.
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Email Erika.
May you be filled with goodness, peace, and joy.
Erika Jackson
(Erika@LifeTrekCoaching.com)
LifeTrek Coaching International
Columbus, OH
U.S.A.
Telephone: 614-565-9953
Fax: 208-977-7793
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