Manage My Budget

Children need to learn financial responsibility because we live in a money centered society. Without this skill your children will flounder. Financial irresponsibility affects most areas of our lives from marriage to buying a home. Here are some ideas to help you.

1. Set a good example. Children are very aware of what is going on around them and they will start questioning some of your actions. Take using a credit card for example. When I fill up sometimes my little children will ask me why I use a credit card if they are bad. I have to chuckle at how intuitive they are. But this gives me an opportunity to explain to them the proper use of a credit card.

2. Take time when your children are young. Many times you are in a hurry when you are out and about so you do not take time to answer your children’s questions. I know it can be frazzling but think a few years down the road. You will want to explain things about money to them but they may not be asking because they already know all the answers. Take the little extra time when they are small.

3. Have a budget. Our spending overtime usually evolves into a budget system since most of us have to be careful with our money. Use this as an opportunity to teach your kids that each month you have a set amount of income that comes in and therefore, you have to be careful how you spend it. This may also help your cause when you are at the store and your child is asking you to buy them everything they see.

4. Delayed gratification. Because of credit cards many people do not learn that they need to save up for things. Like children we want what we see. Use this as an opportunity to teach your children how they can work for what they want. You can help them save their money as they earn it and you can even match it if you want to. I find this gives my children a big incentive if dad is willing to match what they earn.

5. Shopping. As a father I do the grocery shopping sometimes and I frankly do not know how my wife does it. You have to have a degree in purchasing. Add to that whining children and well, you get the idea. What I do is I take a few children with me and I tell them to find the best price on different items. You can even get them a little hand held calculator and teach them to figure cost per ounce.

6. Financial markets. Your children hear comments about the financial markets everyday and may even be asking you questions. This is the best time to start teaching them. Get some books from the library and rent movies like “Wallstreet” and “Trading Places” (Does contain nudity and language so get an edited version). You can watch the news with them and take time to explain to them the meaning behind the financial news. Very good stuff.

Teaching children financial responsibility is a gift you give to them. Money is a tremendous tool but it can also be abused if used incorrectly. Show your children how to be financially savvy by setting a good example and sticking to a budget. Take your children shopping and have them help you make purchases. Do not just buy anything they want but help them earn the money.

Zach Allred is a tax preparer with 20 years experience. Go to Small Business Taxes and sign up for his Free Tax Newsletter. Also visit Tax Preparation to get help with your taxes.