Consistency is key when having financial success as well as when raising children. Not a surprise that consistency is one of the most important aspects to raising financially responsible kids. We all want the best for our kids. The best school, the best friends, the best life. Teaching them as they grow how to be financially responsible will go a long way to giving them the best possible financial life. Let’s look in a bit more depth at two important aspects to raising financially responsible kids.
Have a consistent allowance policy
There are good arguments on both sides of the question of whether or not to give an allowance to your children. Some argue that an allowance is an opportunity to teach children the cycle of money management, while others argue that it boils down to paying children for household chores they should do anyway. I fall into the former camp, so my wife and I give our children a small allowance each week that’s not connected to household chores and responsibilities (which are handled with other penalties if they’re not done).
Regardless what you decide, be consistent. It’s hard for an allowance to teach useful lessons if you change the policy constantly. Once you’ve decided on a policy, stick with it for at least a year so your children can see the full benefits and drawbacks.
When they receive or earn money, make them put aside some for the future
It’s a financial disaster if adults spend every dollar that comes in as soon as they receive it. Children should never think that such rapid spending is normal or good behavior. Instead, you should establish that saving at least some of the money you earn is normal. When you have money, you save part of that money for the future. In our house, we have our children save for medium-term personal goals as well as the long-term goal of college. Medium-term goals usually take the form of expensive toys or hobby kits and the money is saved in a jar in our kitchen, while long-term savings is usually done in a savings account. Our children are required to put aside a portion of every dollar they get – from their allowance and gifts – toward both of these savings
– via US News & World Report
Your Behavior Effects Your Kids Success Financially
Raising financially responsible kids has to do with teaching them directly about finances that is certain. However, our behavior, individually and as a couple, toward each other and toward circumstances can actually help us in that process of teaching them good financial behaviors, or it can impede their progress. Let’s look at some areas you may not have considered that can be very important in raising financially responsible kids.
When your kids are around or within earshot, be aware and make sure any money conversations with your spouse are postponed until you have privacy.
Parent as a team
Healthy parenting requires having a common goal and being on the same page with each other. If Mom says no to the kids, Dad needs to agree — and vice versa. If one of the team members says the opposite, your children will lose respect for you and learn how to manipulate you in order to get their agenda met.
Be firm with borrowing
If children borrow money from you, make sure you get it back on time. Keeping one’s word builds self-respect and impacts self-esteem more than winning trophies.
Flip-flopping in decision-making creates a loss of respect. Stick with the boundaries you have set. If you promise your children a weekly allowance, give it to them without waiting for them to ask for it.
Act calm if there is an emergency
How you behave under stress is a great teaching opportunity. If it’s financial in nature, like being forced to move, your humor and gracefulness under fire will help kids build character.
Stop fighting and call a cease-fire to the silent war
Constant arguing and drama will distract children from being available when they are home. Too much time in their room with their door closed might be giving you a clue that the fighting you are doing with your spouse is not as hidden as you might believe.
– via DailyWorth
Have you had success in teaching your kids about handling their finances well? Are you determined to take steps to raise financially responsible kids so that they also can have a bright financial future?