This past weekend my daughter made me do a double take! I told you last week about the post Your Children Are Watching. What Are you Teaching? by Being Frugal. In it BF talks about financial responsibility in front of your children and making sure they understand what credit cards are. So while we’re standing in line last Saturday my daughter asks when she can get a credit card because “you can buy everything with it!” My daughter is seven. She thought that credit cards had unlimited money on them and you didn’t have to pay them back. I was shocked because I thought my daughter understood what credit cards were (as well as a seven-year-old could at least). Suffice to say I took the next few minutes explaining to her that credit cards were really a loan that you had to pay back quick or you would get charged more money. She seemed to understand. I’ll have to re-visit this with her in the near future to see what stuck.
It is important to make sure your children understand money. And it’s never too early to start teaching them.
Here are a couple of other things we’ve done to help educate my daughter:
- Set up a 529 college savings plan. We told her we did this and explained to her that it will help pay for college later on. Every now and then she asks how much is in it and gets excited about it.
- Set up a sub-account in our ING account in her name. In this savings accounts we put all of her tooth fairy money and a few other small gifts/earnings. We explained to her that the money is safe here and it will earn more money by being there. When I check our account I’ll call her over to show her that it’s earned interest and grown over the month. What’s great about kids is they get excited over a few cents growth (there’s a lesson for us adults in there).
- Let her pay at the cashier. If we’re out at the local diner we’ll let out daughter pay the bill when we’re done (under our supervision of course). We tell her how much it is and what we are giving her. When she comes back she counts the change for us (I also let her keep some of the change). She gets to learn about money by physically experiencing it.
Those are a few things we do. We don’t want money to be a secret. We want her to understand the value of money.
How do you involve your children with your money? Let me know!
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{ 5 comments… read them below or add one }
I have to say that you’re doing more than most!
The credit card offers start pouring about as early as High School. It’s too often that people sign up without hesitation and before you know it…you’re in so much debt it feels almost impossible to pay off!
Credit cards in high school seem insane to me! I got sucked in at college at one of those little tables where they give you something for signing up (I got a Koosh ball). It was a long road of debt after that!
Great post. It is never too early to start training our kids about money. Thanks for sharing! I plan to include your article in my weekly carnival review Friday.
Best Wishes,
Dividends4Life
@4life – Awesome…thanks! Glad you enjoyed.
It seems we have to keep up with all of the advertising that’s out there or else they’ll get to out kids first!
In this turbulent economy, it is vital that parents start teaching their children about money management. People are so worried about their own credit repair that they may forget that there are people looking up to them that need to be educated about the necessities of money management. Many people find out the hard way about the correct way to handle their money and their credit. Mortgages, car bills and credit cards can add up to stack of bills so high that even Sir Edmund Hillary would have trouble ascending them. Teaching our children about the proper way to budget, to plan, and the discipline to follow through are going to be essential skills for them when the current generation of youngsters reaches the age of maturity. When they have their own lives to contend with and it comes time for them to have cars, homes, and credit cards of their own, will they know what to do?. A kids’ money management tip is that when they have something they want to get that’s a large purchase, such as a new bike, start giving them an allowance based on school performance and chores, and show them how to budget for getting that coveted bike. If you have to turn to credit repair services, don’t feel bad. Make sure that you teach your children well about using credit.