Week 31 August 8
When we help children understand there is happiness in providing for themselves through work and prudent budgeting, they are prepared to succeed in a world that rewards consumption and excess.
According to government statistics in the 12 months from July 1, 2019, to June 30,2020 there were 682,363 bankruptcy filings.
Data from the American Bankers Association shows, 43% of credit card accounts carried a balance at some point in the second quarter of 2020. As of January 2020, consumers owed 829 billion dollars in credit card debt. Sallie Mae reports 36 percent of college students have at least $1,000 in credit card debt. This is on top of student loans. When students without credit cards were asked what would change if they had a credit card 40 percent said they would spend more than $100 per month more than they do now.
Frightening, isn't it? Most of us have experienced the stress caused by severe financial strains. Some money worries are unavoidable. Over 40% of all those asked about their divorces mentioned financial challenges as a primary reason for the divorce. Are we setting up our children and grandchildren for failure and heartache?
Children who are taught good habits are far more likely to be wise money managers as adults. Even when very young, children can understand and practice wise budgeting and spending habits.
Share today’s financial challenges with your children and/or grandchildren. Explain inflation and high gas prices and high interest rates and how they are affecting your household budget. Children will already know something has changed and your explanations will help them worry less as they know more.
Help children establish a budget. Ask them about things they have expenses for such as clothes, school supplies, teens may need money for gas or a yearbook. Make them take responsibility to pay for these things. Next make a list of items for short term savings, things they would just like to own. Third, remind them of the cost of college or trade school and have them budget savings for that. No child who has expressed an interest in having something from the store is too young to begin learning to budget.
Finally discuss ways your children can earn money. Earning money may include allowance for things that are not normal chores. Every child should have chores they are not paid for.