Column: Teaching kids about money
Submitted by editor on Tue, 08/25/2015 - 9:31am
It seems a lot of parents are not comfortable talking to their children about money, as well as a couple of other topics. Your children can benefit from learning about money and it will help them grow up as responsible adults with better lives.
Giving to your children, whatever they want, when they ask for it, does not show love. It just teaches them the wrong ideas. The more they can do for themselves, the better in the long run.
I know it is not easy to say "no" or even "not now." If the child is very young but wants a particular item (electronic or otherwise), maybe a savings plan is in order. They could start saving some of their allowance to pay at least part of the purchase price.
If they learn the habit of saving, even small amounts, it can make a big difference in their lives. Maybe you even take them to the bank to open their first savings account. You or a relative could start the account with a birthday check or other windfall. They might like being treated as a "grown up" person.
I'm guessing you or one of your friends learned something about money when the first car was desired. Some parents explained the cost of insurance (and the choices). They also made rules about who pays for the gas and license. The vehicle was more precious and better appreciated if the child paid at least part of the cost of operating and maybe even part of the cost of purchasing the car. I think safe but older cars are best for a beginning driver. That way when the fender gets dented, it is easier to live with and the insurance premiums are less also.
Most parents that are well off financially are careful to raise their children to have realistic views about money and discipline and personal responsibility. The very rich, who probably learned something about creating and keeping family wealth, understand that always indulging kids is not a healthy thing to do.
Of course I favor finding ways for the children to work and earn their own money as soon as they can. I and another twelve year old each wanted to buy a puppy. So, with the fathers help, we started mowing lawns to earn enough to buy the puppies. If you can find some way for the young person to work and earn their own money, the next step is to help them learn to save some of it. If they work in your business, be sure to keep good records of their time and work, but pay them what you would pay a stranger. Too many business owners pay relatives less than is fair and reasonable.
If you can help give them a chance to experience the fun and challenge of hard work, they will appreciate it in the long run. The more you demonstrate wise ways of handling money to your children, the more they will be more comfortable and skilled in handling their own money as adults.
Did you hear: "Only the educated are free." — Epictetus (60-120 AD)
— John Bullis is a certified public accountant, personal financial specialist and certified senior adviser who has served Carson City for more than 45 years. He is founder emeritus of Bullis and Company CPAs.
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