Week 32 Aug.15
Time to keep teaching your children and giving them the gift of self-reliance.
For children who are eight or older take them to the bank and have them establish a savings account. This will help prepare them for banking in the future. At the end of each month, have the children count their money and examine their bank statement to understand that it is growing.
Do not give in and bail out your kids when they want something now! Do not purchase several things from their wants list as gifts. One or two is fine for a special occasion like a birthday or Christmas, but you will not teach them anything if they never feel the sense of accomplishment from saving and purchasing an item they really want, on their own.
All of us, even the youngest among us take better care of items we have saved and sacrificed to purchase.
As an incentive, consider matching any money they place in savings above the percentage you have agreed upon. If they are to save 50% but then save 60% you match the 10% difference.
With older children, discuss income and expenses and help them plan for upcoming expenses.
Let them make mistakes. Debt among college students is staggering. Now, while children are still living at home, is the time to allow them to fail. Catch them. Help them to formulate a new plan to meet their goals, but don’t bail them out. If you decide to loan them money to pay for something you feel is important and urgent, then teach them the concept of interest on the loan. Explain that if you loan them money that money is not available for you to use and you will have to make some sacrifices. This is why interest is charged. If you are the grandparent the same is true for you, don’t bail them out. Loan them the money and insist they pay it back.
Involve others. Let grandparents know what you are trying to teach and let them help. Grandparents are pushovers so ask them to make the children work for cash and just handing them money is not acceptable.
Offer to “hire” a friend’s child if they will “hire” your child. Children often work harder for someone other than mom and dad, and the experience of seeing that other families also work hard can leave a lasting impression.