The next important thing that we need to do is not give them everything they ask for. When we just give in and buy them anything they ask for we are teaching them that they can have anything they want. When they grow up they are then likely to turn to credit to purchase whatever they want. They have been taught that they should get whatever they want.
Once you have mastered these two things there are a lot of ways you can handle your kids and money.
Some only give their kids money as payment for chores around the house. This is not a bad idea as long as the kids are instructed on how to handle their money that they earn. Just make sure they are doing the chores for which they are being paid. I think that it is a good idea for children to learn how to save for things that they want. This will help them learn to wait for things that they really want and it also teaches them that they do not need to buy every time they think they need or want something.
Some parents give their children an allowance. Once again this is not a bad thing in itself as long as they handle this money wisely. There should also be some way for kids to learn the value of earned money as well. I don’t think that it is good if the first time a kid earns money is when they get their first real job once they are out of school.
My wife and I use a system that is a combination in which we give them money that is both a reward for good behavior and payment for things that they do around the house. We give them plus marks on a dry erase board for things that they do around the house and we also take away plus marks for bad behavior. Sometimes they will also get a plus for exceptional behavior. After they get so many plusses, they get some money. This is a real flexible system that we have tailored for our children and us. It works well and the kids are responsible for putting up the plusses that they earn.
It is also wise to let your children know what things cost. We talk to our kids about what items cost that we use on a daily basis and also what things cost that they want. We do not harp on this; they would tire quickly if constantly reminded of what everything costs.
My 12-year-old son had wanted a dirt bike for a couple of years and my wife and I told him that we would not buy one for him. We told him that if he could save money we would help him out. He did a real good job saving and even asked for money for his birthday and Christmas instead of getting a lot of other presents. He finally saved enough money and we found a pretty good deal, he now has his dirt bike.
It is interesting watching our two kids with money. Our son is a saver who plans for the next purchase, while our daughter is very generous. As they get older we will give them more responsibility in purchasing their own clothing to further teach them how to use money wisely.
The basics of how to teach kids about money are very simple.
Make sure that you as a parent handle your money wisely, they will learn from you.
Do not buy them everything they ask for.
Let your kids earn some money and begin to have some responsibility.
