Family lessons in money management

Money. It's something we all eventually earn and use, but often without much guidance or training. Wouldn't it have been nice if someone had given you a few lessons on how to handle money when you were young? While it may be impossible to travel in time, you do have a chance to relive your youth through your children — teaching them the lessons you may have missed yourself. Whether preschoolers or pubescent, here are several simple ideas on how to teach your children about the value of money:

·Talk about where money comes from. Explain how the money you spend comes from the work that you do. Kids need to know it does not just flow endlessly out of bank machines.

· Teach the difference between need, wants, and wishes. Learning the difference at an early age can prepare children to make better spending choices in the future.

· Make it clear there is always a budget or price limit to consider. Help kids realize there are limits to everyone's spending. However, especially with younger children, consider using the phase, “It's not in the budget right now” when turning down requests for purchases. Saying, “We don't have the money for that,” can lead some small children to over-generalize and worry needlessly that there is also no money for other things like food or clothing.

·Let kids handle money. Going to the store, market or on an outing? Consider giving your kids a few dollars to spend. Try not to interfere too much with spending decisions, even if you disagree. Poor choices often provide excellent learning experiences and opportunities for discussion later.

· Look for teachable moments while grocery shopping. This could include showing kids how to compare unit prices, use coupons & fliers, and/or how to shop on a budget. This can also lead to other valuable lessons like cost vs. value—often proving the adage, "You get what you pay for."
Allowance, saving, and charity …

·Decide how much to give. How much to give for allowance is open to debate, and can vary greatly from family to family. Some parents offer $1 for each year of age, while others link it to the amount of responsibility the children assume around the house. Still others try to base an amount on what is reasonable for entertainment and personal spending/savings. Either way, an allowance can offer children a valuable opportunity to experience limits.
When giving an allowance, try giving it in denominations that encourage saving. For example, instead of giving a $5 bill, offer two toonies and a loonie and encourage $1 to be put aside for savings.

· Consider supporting others in need. Some parents also suggest their children set aside part of their allowance to support a children's charity or other worthwhile cause.

· Have your kids open a bank or credit union savings account. This is an excellent way to begin forging the habit of savings at an early age. Just be sure not to be too restrictive about letting them withdraw some money.
And finally …Teach by example. No matter what you tell your children about money, your own actions speak louder than words. Do you budget? Are you setting aside savings each month for education, retirements, or future purchases? The things your kids hear you say or do about money can have a big influence on the attitudes they form themselves.

Parent Coach, Rob Stringer helps regular families achieve remarkable results. Access his free monthly newsletter and other resources at www.ParentingWithIntention.ca.