One of the most important things we do as parents is to teach our children how to be wise stewards of their resources, especially their money.
Mary Hunt, author of Raising Financially Confident Kids, offers us excellent advice as we seek to prepare our children with the skills they need.
Notes from the Interview...
Money is a fantastic tool to teach children responsibility.
When should I start?
- Start as soon as possible.
- Three isn’t too young, and it’s never too late.
- Jump right in.
What should I teach them?
- Teach them God has blessed them with resources and expects them to manage them.
- Teach them the difference between wants and needs.
- Teach them your family rules.
What should I give them?
- Give them a responsibility list, and add more to their list every year.
- Give them a salary and expect them to manage it. Start with money for their wants, and then gradually give them responsibility and money for their needs.
- Give them part of the family budget to manage.
What are some good family rules?
- Honor family values.
- Give 10%.
- Save 10%.
- No loans or bailouts.
- Track spending. Use the record to understand and improve how to spend and save.
What are other guidelines and suggestions?
- Trust your kids to follow your family values and rules.
- Allow them to make decisions and live with the consequences.
- Don’t tie chores to their salary.
- Give citations for infractions.
- Have a 15% family tax. At the end of the year let everyone decide how to spend it.
What if my child is a teenager already?
- It’s never too late. If you start with an older teen, you can help them get up to speed.
- Read the book, then give it to your child to read.
- Put them on salary immediately.
- Limit their responsibilities at first, but add more each month.
- Be sure to read the Epilogue.
