Liz & Greg Weido, Primerica Financial Services
One of life’s ironies is that we go to school to learn how to make money, but we don’t learn strategies for handling that money responsibly. As a parent, you’re in the perfect position to guide your children through the money maze as you help them develop healthy money attitudes and formulate good strategies for saving, spending, investing and giving back to their communities.
As they grow up, kids pick up on adults’ behaviors and attitudes — whether social, work-related or financial. So modeling good money management is one of the best things you can do to get them ready to handle their own money. In fact, many adults’ money issues come from childhood impressions they got from their parents. Here are a few things you can do to avoid passing a negative legacy on to your kids:
Set an Example
• Decide what attitudes you want your kids to have toward money, then exhibit them yourself.
• Emphasize the “value” of money. Teach your kids that money isn’t “free.” You have to work for it, and thus, you are working for the things you purchase.
• Pay yourself first. Overall personal saving in the U.S. is at a dismal 5.3%. If you want your kids to save, they’ve got to see you doing it, too.
• Get your debt under control. The average American household with credit cards carries about $16,000 on those cards. Indirectly teaching your kids to rely on credit could give them the wrong idea about plastic.
• Be in the habit of giving. When you give to charitable causes, you’re encouraging your kids to be socially minded.
• Speak openly about money with your kids. You don’t have to go into all the details of your family finances, but talking about how money works and how to use it wisely will go a long way.
• Keep your priorities straight. The last thing you want to pass on to your kids is the feeling that money is more important than family and friends. Money can’t buy happiness … or love, but learning how to manage money wisely will enable your kids to avoid many of the same money mistakes you may have made.