Personal Finance Advice

Think about what an abstract concept personal finance can seem like to young children.  Unless you have taken the time to explain the nuances of personal finance to them then it’s likely that from their perspective, buying stuff is as easy as taking a debit or credit card out of a wallet and swiping it in a terminal.  Do your kids know that these cards mean more than a simple swipe? Do they know that you have to actually work to earn money to buy things?

If you haven’t explained it to them, there’s a good chance that they don’t know.

You may not think that there is much merit to teaching a young child about money since they’re not going out and making it and managing it at their age.  Think again.  You should be teaching kids about personal finances as early as possible for a few reasons:

1.  They’ll have a greater appreciation for what it takes to earn money.

2.  They might not be as prone to demand money as though it grows on trees.

3.  They will learn to manage money at an early age, which is something many adults haven’t learned to do.

As a parent, it’s your responsibility to equip your kids with the skills they need to succeed when they grow into adulthood and move out on their own.  For one reason or another, many parents don’t teach their kids the lessons they need regarding personal finances.  Maybe parents don’t feel as though the kids are old enough to learn about money, or perhaps parents are reluctant to talk about finances because they are ashamed of the state of their own finances.  Whatever the reason for the reluctance, it’s still no excuse to not give your kids the financial knowledge necessary to someday prepare them to handle money on their own.

Start introducing your children to the family’s finances.  Explain financial transactions to them in simple terms that they will be able to understand.  Instead of ushering them through the line at the grocery store, tell them what’s happening.  Explain to them how the debit card you swipe is linked to your bank account, and how you’re bank account has money in it that you earned from working.  Consider giving your children allowances so they can learn about working to earn money.

 Most financial institutions have savings accounts and educational materials for young children.  Check with your bank or credit union to see what they have available for your children so you can start giving your kids the knowledge they need to someday handle their own personal finances.