How To Manage Money – Why Your Child Must Learn This
The Shocking Truth about Your Child’s Education on How to Manage Money
Now, more than ever, every parent must come to the realization that our children must be taught early how to manage money. You don’t have to look far to see not only individuals having financial problems, but countries as well. I think that we all will agree that money management is important, but what are we doing about it?
Those of you that have children in grade school know that children are not learning about the different ways to save money as a part of their curriculum. As a matter of fact, I’ve spoken with parents of high school graduates who have stated that their child did not have any training in money management throughout the four years of high school either.
Some educators and others, say that the principles of budgeting and managing money should be done at home, and perhaps this is true to a certain extent. Yet, as important as it is to start early to teach children these concepts, in most situations it isn’t done.
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In grade school in most parts of the country, children are taught sex education, so why not how to manage money? In most homes today, both parents must work just to make ends meet, and there isn’t much family time left.
For too many years, the current generation has relied on credit cards to pay for their wants and also their desires. In my practice, I’ve seen many young couples who have amassed credit card debt of $40,000.00 to $50,000.00, and struggle to make just the minimum payment.
What lesson do you think their children will learn from this? Reluctantly, I believe that they will quickly learn that they can have almost anything they want as long as they have access to credit cards.
Many experts in child behavior believe that children learn many of the bad habits of their parents simply by observing. While we agree that children should be taught how to budget money as a part of the school curriculum, it’s also the responsibility of the parents to make sure that their children are taught basic budgeting and money management at home to reinforce what they learn in school.
Parents can begin by taking them to the grocery store and explaining the concepts of money and why it is so important to live within a budget.
Schools teach our children about health issues and sex, so why not proper money management? I think that it’s an important subject and would not be that difficult to incorporate into the curriculum.
Children should be taught early on, all of these important issues that will help them throughout life. With special emphasis being done in school and also at home, perhaps the next generation will have a better grasp of the meaning of fiscal responsibility.
Do you think our world economy would be in the shape that it’s now in if our lawmakers and other leaders would stop the reckless spending? Many of them don’t seem to have any concept of how large out debt is and some don’t care. I wrote a blog post a few months ago about taxes and recommended that all lawmakers should read the book “Taxes for Dummies”. Perhaps, now, they should also be required to learn proper budgeting and how to manage money. There must be a book on “:Budgeting for Dummies” as well.
There are some economists that still believe we are not heading in the right direction as far as spending and sound money management, and at times, I agree. As a nation, we must adopt sound money management principles and stick to them.
Just as important, we need to elect those lawmakers who are of a like mind. We can no longer take this risk and must see to it that our children are taught early in their school years, and also throughout their high school and college years, how to budget money and live within their means.
In addition to that, being taught how to save and also provide for their retirement should be a part of the ongoing learning process. Parents, do your children know where your money comes from? Do you teach them about saving? Have you mentioned the “B” word to them…budgeting? Do you have a family budget? I won’t ask for a show of hands, but you get the idea. Children will learn your habits, so why not allow them to learn a good one such as how to budget money and live within your means?
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20 responses to “How To Manage Money – Why Your Child Must Learn This”
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Kids will never learn the idea of budgeting until they know where the money is coming from and how hard it is to earn. I’ve been there, done that. We were never taught how to manage money. It is a brilliant idea to teach the younger generations how to manage money. They will be less likely to get into financial trouble in the future.
You’re so right, and for that reason, we always emphasize that teaching children about money should start at an early age. Sometimes a young child will really surprise you at what they have learned simply by watching their parents. Thanks for your comment.
I truly believe that budgeting and financial planning should be taught as compulsory curriculum in high school. These skills, more than music and gym, and even math, are what determine a persons’ success in life – I know plenty of drop outs that didn’t make it past grade 10, but knew how to manage their money and save. They all own their own businesses now, and I’m still trying to pay off student debt and get out the payday loan cycle!
I hear you, Erica … I am 50 years old and STILL paying off student debt! Both mine and my children’s college loans, believe it or not. It’s all fine and good to say we shouldn’t be in debt – but what’s the alternative when seeking to get a college degree in these days? If congress cared about the future more, they would realize that an educated society is one that raises the standards for everyone.
There are many ways that children and teenagers can learn about money. Most children know how to earn it. How to budget, how to save, how to invest are critical skills for our children to learn and if the system does not teach these skills, then it is up to every parent in the world to assist their own child to be educated financially.
The ideal, which is what we emphasize, is to have a curriculum in our schools where the children are taught all of the basics and beyond. Then the parents should reinforce those teachings with practical examples.
I am a 22 year old student and I regret that I did not manage my money well in the last 4-5 years.
I have wasted hundreds of dollars on stupid stuff, which could have been used to do something productive.
This article is very good for me, I am trying to learn how to manage money efficiently.
Hopefully, the issue of credit card debt will resolve itself, at least for a few years, since the banks are adapting such strict rules – and everyone has bad credit now, at least compared to what it used to be like. But only a few years ago, I went with my son to buy books for his college classes, and there were – literally – dozens of tables set up by credit card companies, flagging people down and yelling out – like they were hawkers at a circus (!), offering credit to anyone with a university ID. I saw it with my own eyes – and then my son walked in one day with a credit card – with a $15,000 limit! He was a college kid with no job, and no means to pay it back. So THIS is what our schools are teaching is okay?? I think – I hope – that practice has stopped now. But this was in 2006, not too long ago. And the story does NOT have a happy ending. 🙁
Regarding your question in this article: “Do you think our world economy would be in the shape that it’s now in if our lawmakers and other leaders would stop the reckless spending?
I agree that nobody should be in debt. However — don’t you think that we should first get the economy back on track and build jobs and help people get a decent education, etc. – before applying strict austerity measures? It’s going to take some spending now to prevent worse problems in the future. And remember – the same party that is now bashing the O Administration for being in debt, is the same party that CREATED that debt during the Bush years. Remember that when Prez Clinton gave the reigns over, we had a massive SURPLUS.
Yes, we should get the economy back on track and create jobs, but in order to do that, the reckless spending by both parties has to be reined in. Do you have any idea what the war in Iraq and Afghanistan has cost the US? The American lives lost is the worst sacrifice. You’re correct, the problem began with Bush because of his incompetence and big ego, and it ballooned from there. I fault both parties then and now for the shape that we are now in. Why do we give foreign aid in the billions to countries that hate us? You cannot buy loyalty. Most of those funds never get to the individuals that need the help, but is skimmed off and stolen by bureaucrats. Where did Saddam Hussein get all of his money that is or was in Swiss bank accounts? I could write a book on this, and perhaps at least, another article. Thanks for your thought provoking comment.
I just thought of a book that should be required reading for all members of Congress and the House, in addition to the White House and advisers…”Budgeting for Dummies”. I would be willing to make a substantial contribution to buy that book for them.
Your post is really on point teaching children how to save money. They need to start when they are in their tender age so that when they become adult it will be very easy for them.
My parents both worked full-time jobs growing up, and they really instill the value of hard work. I work a full-time, great job making close to $50k, but I still do extra odds and ends too. It’s too scary to think where our economy is going. I’m doing everything I can to be SAFE with my future. Security!!!!!
I agree, the White House publishes various reports stating how the economy has turned around and we are doing great. They must wear blinders and can’t see all of the individuals that still are unemployed, or the elderly on fixed incomes that have to cut pills in half because they need money to buy food. We’re supposed to be the wealthiest country in the world and have this scenario.
For my niece and nephews, I bought them savings bonds. I just think kids don’t understand the value of money. Toys and clothes… they’ll get what they need from their parents. Everything else is excess. -b
Our daughter is only 4 and a half but we’ve already started teaching her money management. We started first with getting her a piggy bank, and she gets a small allowance each day for doing her chores (whatever change my husband comes home with in his pocket). If she doesn’t do her chores, she doesn’t get her allowance that day. As she puts the money into the piggy bank she counts it out, tells us what each coin is worth and what it’s called, then puts it in. When she wants to buy something, we count how much money she has in her piggy bank and then she gets to buy whatever it is (if she decides it’s worth it to empty her piggy bank) and she’s the one that hands the money to the cashier and everything. If she doesn’t have enough money for what she wants then she picks something of hers out that she no longer uses to sell, and we put it online and the money that comes in goes into her piggy bank. From selling her old toys, books, and clothes she ended up earning $45 (not bad for a 4 year old) and buying herself her summer wardrobe. A self sufficient 4 year old…. I’m surprised parents don’t do this with their middle and high schoolers. I always had to do extra chores if I wanted an allowance, and manual labor like yard work when I was growing up, and even then my parents could only afford to give me a few dollars. If I wanted something as a child, I had to save up for it. No credit cards.
Great article.
Very smart move, as long as they are able to understand, a good time to start.
Man, I wish YOU were a bigwig lawmaker. You have the humble attitude to admit that hey, sometimes we need to read books specifically for dummies, and that’s OK! Our current lawmakers could definitely benefit from an OUNCE of that attitude!
The post says that it’s important to introduce concepts of money and budgeting to our children. I know real world situations are the best, but are there any games or apps on the market that can reinforce these ideas? Thanks!
Hi Shelby,
Yes, a search on the internet will bring many games and other teaching aids for kids of all ages. As a start here is a link for one that covers all ages: http://www.themint.org/kids/