A lot of kids are used to Mom and Dad saying “yes” to whatever they want. Whether it’s clothes, the latest cell phone, music lessons, dance class, or pricey birthday parties. In fact, many parents believe it’s crucial to keep their kids happy and busy – no matter what it costs. With the current economy, a lot of parents are being forced to say “no” to their kids – many for the first time and the kids aren’t happy. According to The New York Times, most teens are pretty naïve about finance. Researchers found that 62% of high school students don’t know the difference between credit and debit cards and have no knowledge of budgeting, check-writing, or paying bills. Financial expert Suze Orman says it’s never too early to teach your kids about money. In fact, they should start learning the minute they’ve mastered basic math. Here are her suggestions:
- If you’re having financial troubles, don’t pretend everything’s okay. Kids will pick up on the tension and worry about everything from money, to mom and dad breaking up. Instead, work together to find ways to cut corners, like shopping at thrift stores instead of the mall. Kids like to feel that their opinions and input counts.
- Then, help kids learn the value of money. The truth is, many kids have no idea how much things cost – especially necessities like food and shelter. For example, one economics professor mentioned in the article showed her son the monthly mortgage bill – and he thought it was the annual payment. So, let your kids see where your money goes - and put it in terms they’ll understand. If they get $20 a week in allowance, it’d take almost 2 years - to pay one monthly mortgage payment of $2,000.
- Help them get a grasp on budgeting. You can start by putting their weekly allowance on a debit card. If they run out of money, that’s it for the week. Eventually, they’ll learn how to budget and live within their means.
- Show your kids it’s not all about money. How? By rewarding them with your time. For example, instead of handing over $30 for an “A” on their report card, give them a special afternoon with Mom or Dad. It’ll help them learn the value of personal relationships.