Do you fear your children will waste their inheritance? If so, you are among 30% of parents who believe their family’s next generation has less than good money management skills. Be proactive and consider how you can impact your children’s money attitudes.
Take Advantage of Quizzical Children
As we all know, young children can ask a lot of questions about every topic imaginable, including money. During that time, it’s our choice as parents to deflect these questions or use them as learning opportunities. While children may be taught some money handling skills at school, rarely are they equipped to manage a budget or begin a saving program when they graduate. It will be up to you to instill financial responsibility and help your children develop a proper perspective concerning money. In fact, 70 percent of parents realize their kid’s primary financial education comes from watching them (Citi survey). No matter what your family’s financial situation, there are many ways to teach your children to be thoughtful and responsible regarding money. Here’s just one example:
“Give Five”
If your objective is to teach your children generosity and to have a healthy perspective regarding money, then the simple act of sharing may be the answer. One effective method for encouraging your children to share is to tie sharing to their allowance or the money they earn doing jobs for you or others. Consider this powerful concept called “Give Five” that will help you drive home the point.Give 5%
Suggest that your child give 5 percent of their money to a charitable or non-profit organization which has values and beliefs similar to theirs. For example, young children may find the Indianapolis Zoo a perfect fit. Keep a clear jar on the kitchen table as a visual reminder of their generosity so they can see their money grow from week-to-week. They can even decorate the jar with animal stickers to remind them of why they are giving. Over time, this simple exercise can teach them a better understanding of the important role charitable and non-profit organizations play in our community. Hopefully, they will also gain a sense of appreciation for their own personal financial situation.
Work 5 hours
If old enough, suggest to your child that he/she give five hours of their personal time every month or so to a charity or non-profit organization. If too young to do so on their own, make it a family event and you share the experience. If they choose to give both their personal time and money to the same organization, they get the added benefit of seeing their contribution put to good use. This may put their future financial decisions into perspective. Do I really need a new pair of jeans or would my charity put the money to better use?
For more ideas, check out The Opposite of Spoiled (Raising Kids Who Are Grounded, Generous, and Smart About Money) by New York Times Columnist, Ron Lieber. This book, which uses real-life examples, provides wonderful advice on ways to engage in important financial conversations with children between the ages of 6 and 14.