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To Your Wealth Michael P Haubrich January 2006 Resolve to help
children develop financial responsibility |
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Now that the
wrappings have been cleared and the ornaments stored for another long hiatus,
it’s natural to turn attention to the infamous and all too often short-lived
resolutions that will guide our actions for the coming year. While it’s
important to commit to losing that extra ten pounds or to balancing your
checkbook regularly, helping children develop a sense of financial
responsibility is one resolution that could have lasting impact on future
generations for your family. Every child should
possess some fundamental skills that will enable them to develop healthy
attitudes about money, earning, saving, investing, and philanthropy in the
future. Since children mature and develop at different rates, it’s important
to recognize that different skills will be best adopted at age and maturity
levels. For example, there’s little benefit in sharing budgeting skills with
a three year old, and first broaching the subject with an 18 year old may be
a case of too little, too late. In order for children to develop a sense of
financial responsibility, they should be exposed to positive dialogues about
money, money management, saving and other topics throughout their formative
and teen years. This early and consistent exposure will allow them to develop
deeper and deeper levels of understanding as they mature cognitively and
financially. Parents and other
adults can help children develop healthy money habits by demonstrating the
behaviors they want to see replicated in their children. Telling a child to
practice being responsible when your actions seem to indicate that you use
money to make problems go away, could be sending mixed signals to the ever
observant youngster who easily recognizes the disconnection between what is
said and what is done. Similarly, it would be difficult to teach a young
person the value of living within your means if you carry exorbitant balances
on your own credit cards. In her book, Raising
Financially Fit Kids, Joline Godfrey outlines
ten basic money skills that children should learn progressively as they
mature. Those skills include how to save, how to keep track of money, how to
get paid what you are worth, how to spend wisely, how to talk about money,
how to live a budget, how to invest, how to exercise the entrepreneurial
spirit, how to handle credit and how to use money to change the world. A quick internet
search revealed many, many other resources to help adults teach kids about
financial responsibility. For example, www.kidsmoneystore.com promotes
itself as “featuring hundreds of kids’ money books, audio books, videos,
banks, games, and learning activities” all geared to helping children develop
this important life skill. So this year, I
propose several suggestions that can serve as the foundation for a resolution
with lasting impact. Help your children build their first lemonade stand or
encourage them to create something for which can they realize a financial
reward. Teach your child the value of putting some of that financial reward
toward saving—and another part of that toward a charitable contribution to a
church group or special collection. Help your children understand that
waiting for something isn’t a bad thing; rather it’s often in the waiting
period that they decide it really wasn’t that important to have in the first
place. Clip coupons with your youngster and help them understand how they can
be used to reduce expenses and then calculate how much money you can save
during your next trip to the grocery store. Help your teenage son realize
that if he wants to enjoy the privilege of driving a vehicle, he must also
bear the responsibility of that vehicle in terms of maintenance, gas, and
insurance. There are many,
many ways, creative and mundane, that we can teach our children positive
money behaviors that will help them become responsible, contributing,
philanthropic adults. |