Teaching Children good Financial Sense  

I understand your concern regarding your children's welfare. What you have experienced as a child was okay. In fact, I also do it on my children. I mean I give them school allowance just enough for them to buy simple snacks. They don't really need much so there's no point giving them large amounts. At the same time, I always explain to my kids the value of hard-earned money, and that saving is a good practice. When they were young, I taught them how to save by having piggy banks each. In addition, in church, I make a point to let them drop our donation to the collection box which for me is a training on generosity.

I think all kids can be taught financial sense! to a degree, my children understand that money doesnt just come out of the hole in the wall and that people have to earn it. The older two have grown up to appreciate that and both have good jobs and nothing on credit.

Parents spend time and money on tutors, music lessons, and organized sports; provide computers and the latest electronic games but they are not providing their children with one of the most important things their children will need to survive in the real world -- good financial sense.
You can start your child's financial education with five minutes and some loose change. A basic understanding of money is critical, including such things as where money comes from and how it is used. Don't assume kids understand these basics.

I am always trying to teach my son and nieces from example..They are used to getting a lot of pocket money from their dads and step dads and they are shopaholics, my young nieces that is. I try to teach them to save from what they get. My son is quite good and he doesn't ask if he knows I am hard up. I do see the trend though of consumerism really cripping onto the young ones..I nickname young kids MR I WANT AND MRS I NEED..BECAUSE sometimes that is all we hear from their mouths lol..especially when they are very young and are looking in the Argos catalogue!!!
When my six year old niece comes up to me with the book and she says SHE NEED SOME NAIL EXTENSIONS, my mind boggles lol..When I stay with my sister I just make them save money in a pot, then they go and get the more expensive item they want..the same with my Son..If he wants something more expensive, except birthdays and xmas of course, then he has to save from his weekly money.

The Chinese in our community are good in this. They let their children feel how hard it is to find money. Our rich Chinese businessmen here do not give money to their children that easily. They make them work, do menial job at the store before they are given their allowance. This is very good training I guess for children to grow up knowing the value of money.

Racheldarcy...my Grandmother used to say its not how much money you make, but what you do with it. I've known people who were making loads of cash, but they were broke and always worried about loosing everything.

I do agree, we learn a lot of our spending habits from our parents, but we (as kids) make other mistakes. My parents weren't rich, but we were never broke. Everything that wasn't an emergency was planned out, and normally the family would get everything on a "want" list that was in reason.

As for the act of teaching, both me and the missus tried some different techniques. Since each kid was different, some work better then others....
1. The oldest always was curious about credit and debit cards (age 9 at the time). At that age, she thought everything could be paid for with plastic, and never fully understood that a bill had to be paid. So, when she turned 10, we gave her a special credit card (one of those free advert inserts), and expalined she had $100 to spend (with our permission), but she had to pay back the amount with interest...Well, she was in heaven (and I had some 'splainin to do with the missus...lol). She wanted to buy a small CD player and I told her that the bill would have to be paid at the end of the month with her B-day money. Well, was she in for a shock when I had sent a bill! Later that year, she left the card in the drive way when she was playing. Again, I sent another bill for $100 as if someone used the card without her approval. She learned her lesson and was very happy when we gave her money back.
2. Money for chores. We put up a daily work chart with various monetary rewards. If the kids want to buy something, they can work for it....this works great with the second girl.
3. All of the kids have a savings account. When the make a deposit, we'd match the amount. And only when the amount reaches a certain level, are they allowed to pull some money. Well, this backfired with my daughter managed to pigeon hole all of the year's recyclable can/bottle money. Needless to say, I didn't have my own allowance for the month.....

I still haven't mastered my Mom's art of using lots of envelopes and after each payday, fill envelopes with certain amounts of money. This was used for yearly or repetitive bills. Instead, I try to pay bills a year in advance when money is available.

The one thing I've done better then my parents was I started saving much earlier for retirement then they did. At age 22, I opened up and IRA and bought a sizable life insurance policy. Then, I capped my paycheck at 1992 levels for the next 10 years. All of the other money was put into various investments. Yes, I gave up the toys, SUVs, fancy clothes, etc...but in another year, I'll retire at age 39, with the ability to pay for a house in cash, and be debt free. LOL, all of this with a one paycheck household, four healthy kids, and a loving wife. Most of these years, we qualified for reduced lunch, WIC, and for a period of two years we even qualified for food stamps!

The question I ask is, do you want to live life now, and risk not having anything for the future, or do you want to save and live frugally now, and really be in a position to relax when your older? Now, if I choose a job to work after retirement, I can choose any job for any reason....No worries, no debt....

I think that in a way it is very true, i think if you start to give a child their pocket money then they will become more money wise and learn that it does not grow on trees, i think that this would also learn them a little in the maths section, thanks

I grew up in a poor family and can understand fully well the value of saving money. My parents and grandmother didn't really taught us how to save every coins and bills we have. They only told us that we should worked hard for whatever money and things we are asking from them.

I have set aside some insurance and personal accounts for each of my girls. I also provide a piggy bank for each of them. For every household chores they did, I will give them a coin. Its my way of showing them that they deserve a reward for helping me out. It is also common for them to receive money as a gift during Christmas or Birthday. They will hand out the money to me and I will add it to their accounts.

frankly speakin my parents have the same money problem....hehehehe!! and i htink u've come up with great ways to make up with lil amount in ur poket. so i think its better not to go for special ways, jus give them small amounts to spend and let them judge which thing is important for them to spend money on.

If you are interested in going this route, there is a fellow out of the US named DAVE RAMSEY who has a free money advice program that is streamed online, podcast and rebroadcast on XM and Sirius satellite systems.

He also has a system available for teaching children good money habits from the beginning.

You may want to listen to him for free first and see if you like him. I do! And I live in Canada.

http://www.daveramsey.com

Good stuff available for easy money management.