Carolyn Johnston, Co-Author of “Power Spending: Getting More For Less,” contributed the following post:
The last blog I wrote was about raising financially responsible children, and I gave a list of seven things that you should teach your children if you want them to grow into independent, happy, and productive children.
To move from theory to practice, I’ve expanded on the list to show how you can teach your children the principles and practical application of it. The theory is always easier than practice, but here goes…
Principle: If children want money (things), they need to work to get them.
Application: We have an economic system that requires its citizens to work for a living. Teach children that they can “earn” things by working. Help them to find satisfaction in doing a job well.
Principle: Work is good.
Application: As family members, we all need to share in household duties and do our part to look after our own needs. Some of this “work” will receive monetary compensation; much of it won’t. Let children start to contribute at an early age.
Principle: It’s okay to dream but very important to know what they need and not just what they want.
Application: It’s important to set goals and then to plan and follow a budget. Show your children how this is done. Include them in family discussions and work with them individually.
Principle: Children can’t have everything.
Application: Our world is full of wonderful, desirable things. Teach children to prioritize and to pursue worthwhile things. They should work for things that are important to them, not necessarily what advertisers tell them should be important to them.
Principle: If they haven’t paid for it, it’s not really theirs.
Application: Help children understand compound interest as it works for them (savings and investments) and against them (credit and debt).
Principle: Things do NOT = happiness.
Application: Help your children find joy in relationships and friendships. Provide ways for them to develop physically, emotionally, intellectually, spiritually, and socially. Encourage the pursuit of worthwhile activities and help them to develop their talents and pursue their interests. Let them know that “things” do not bring joy or satisfaction.
Principle: It’s not all about them.
Application: We are just a small part of a huge world. We need to be aware of those around us and be willing to lend a hand to those in need. Give your children opportunities to give of themselves and serve others, and you will give them the key to a happy life.
Don’t feel bad if you can’t give your children every “thing.” If you implement these suggestions and show your children how to be fiscally responsible, you’ll have given them enough.
What money lessons have you taught your children, and how did you do it?