Many of us were not taught the importance of personal money management when we were young. We did not learn to save, invest, allocate, or how to make our money work for us. Many of us are in debt, have no idea how we got here and do not know how to start digging ourselves out. Well, today you can break the vicious cycle by teaching your young ones to better manage their finances, starting with their allowance and birthday money.
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Our parents didn’t know so we don’t know.
The fact that your parents never taught you money management only shows that they did not learn it themselves. Once you learn the benefits of financial management, not passing it on to your children would be a crime. As a parent you want your kids to be successful in life. It does not matter how much they end up earning for a living, if they know how to manage it, they can live very comfortably and avoid the number one pitfall in America…DEBT! Just think of all the times you said to yourself “If I only knew”. Well, now you do and have a chance to break the cycle.
We all depend on money in one way or another, some of us use it to better our lives and some of us get used by it. Some of us work hard for it and some of us put it to work for us. By social standards the ones that use it to better their lives and put it to work for them are the successful ones.
It isn’t hard to make money work for you if you understand how money works. If at age 20 you knew the basics of saving and planning for retirement it is most likely that you would have started saving for it. Worst case scenario, when it was time to retire you would have enough to live off the interest. Best case scenario you would have an island next to Angelina Jolie with a private jet to swoop you anywhere you want to go.
Everything is for sale.
The second reason we do not manage money well, is that there are so many companies trying to get it out of our pockets. These companies have the best advertising minds and years of research working to get us to spend. I have nothing against buying what you want and need, but there are ways to get everything we want and not end up in debt.
The problems is, we do not want to wait or save for these things. Children’s minds are copy machines, they usually end up doing what they see us do and continue that pattern all their lives. Their financial future depends on what they learn from a young age. I was taught by my mother how to manage my money since I was young, and because of this I have always been good at saving and spending wisely. If she did not take the time to teach me, it is a good chance I would not have the skills and patience that I have today.
One of my rules in life is to save for everything over $10, and before I had a handle on it, I had what I called a $10 sub-savings account. I would keep it at $100, and when I used any of it I would replace it $10 at a time. It is little things like these that I will teach my child when I am lucky enough to have one. If you do not have good habits start developing some now and teach them to your young ones as you learn them. There are many books you can read such as Personal Finance For Dummies, Rich Dad Poor Dad, I Will Teach You To Be Rich and many more to get you started. Getting them in the habit of putting away a small percentage of the money they receive will benefit them throughout their lives. Taking them to the bank to setup their own bank accounts and make their own deposits will give them a sense of ownership. Give them an early start so they never have to say “If I only knew.”
Contributor’s articles are written by members of the personal finance community. Each article was reviewed Moolanomy’s editorial team before its publication.