Teaching children healthy spending habits when they’re young will help ensure that they become fiscally responsible adults.
Two weeks ago I handed my son his first debit card for his own bank account. Since he’s 15 years old, I figured it was time for him to control his own money. For the past couple of years he’s received a minimal allowance, which he’s never complained about. Most kids would scoff at $20 a week, but not him. Every time I handed him a $20, you’d think he’d just received $100.
But what he didn’t know was that technically he was earning $40 a week for the errands he’s required to do. For the last several years the extra $20 he wasn’t getting was going directly into his account.
As I handed him the card, he looked at it and asked, “What am I going to do with this? I don’t have any money in the account.” I then handed him his bank statement, and his eyes almost popped out of his head. He took his card and slid it into his wallet, next to his library card and state ID. He said he was now “official.”
Official what? I have no idea. But I told him to slow his roll. In the words of Voltaire, “With great power comes great responsibility.” By “power,” I mean handling your own finances.
Raising a financially responsible child isn’t exactly the easiest thing to do. Some kids still believe that money grows on trees or think your name happens to be “ATM” or even “PayPal.” But if you want to ensure that your kid is on the right path, the earlier you start, the better.
According to Tonya Rapley, founder of MyFabFinance.com, strengthening a child’s relationship with money is one of the first steps parents should take.
“Show them … that money doesn’t grow on trees and that life costs money. Allow them to sit with you as you budget,” Rapley says. “I once had a friend whose 7-year-old found out how much his day camp was. He felt guilty for asking for so many things and began to check his requests once he realized that he was expensive. So I think a first step in teaching budgeting is being transparent about household finances with your child when the time is appropriate.”
Source: The Root | YESHA CALLAHAN