Teaching Children Money Management

Teaching Children Money Management

By: Heather Murray: Advantage Credit Counseling Service

It’s back to school time and along with reading, writing and arithmetic, there’s an important subject parents should be teaching children at home – money management.  

 It’s never too young to start making your child aware of money, what it’s used for and how to spend responsibly.   Young adults are faced with financial decisions earlier than previous generations, which is why it’s important to educate children about money from a young age. 

 Once children start elementary school and start learning about money, they can better understand the value of it.  This is also a good time to start giving an allowance.

 If you’re going to give your child an allowance, you might want to use the philosophy: Spend Some, Save Some, Share Some.  You can require your child to put away a certain percentage of their allowance to donate to charity and to save.  If your child’s allowance is five dollars, it might be good to suggest they put 50 cents aside for charity and 50 cents for savings. 

 If you’re going to give your child an allowance, there are some guidelines you might want to follow.  Always pay your child’s allowance on time.  Just like an adult relies on a paycheck, your child should rely on his or her allowance.   Consider making Sunday night payday.  Your child will have to make it last through the week as opposed to blowing it all on the weekend. 

 Another good way to teach your children about money management is getting them involved in your routine budgeting activities.  If your family is planning a vacation, involve your children in determining your vacation budget.  Show your children how you pay your bills and balance your checkbook.  Involve your children in budgeting for groceries.  If you’re looking to cut your grocery bill, go through store sale ads with your children and comparison shop.  Or let them help you clip coupons and show them how much money you save at the store by using coupons.

 Remember, your kids will learn the most about money management from you.  Before you start teaching your kids about money, evaluate your money management skills.  Consider these questions:  Is your approach to financial matters calm and rational? Do you argue about money? Do you feel guilty about money? Is money a way to express your feelings?  If you answered yes to any of these questions, step back and evaluate how you need to change your money management skills before talking to your children. 

 If you find money management difficult, you may want to consider a budget counseling session with Advantage Credit Counseling Service, Inc.  Advantage CCS is a nonprofit, Pittsburgh-based credit counseling agency.   A budget counseling session will provide a better understanding of money coming in and money going out.  Counseling sessions are free and can be conducted in person, over the phone or via the agency’s new online system.  The 100 percent secure, intelligent design system will produce a budget and a detailed, customized action plan that may help you better manage your finances.  It’s available on the agency’s website www.advantageccs.org.  Phone or in-person appointments can be scheduled by calling 412-390-1300.