Most of us want our kids to grow up to be successful — especially when it comes to money. While you may not care if your child becomes a millionaire, chances are that you at least want your child to be smart about money, and live a comfortable life that he or she can afford. In order to get to that point, though, you need to help your child learn about money. As you consider what to teach your child, here are five important money lessons your kids should learn:
1. You Don’t Always Get What You Want
Giving your child everything he or she wants may seem like the loving thing to do, but it’s not realistic. We don’t always get what we want. As adults, we know that sometimes it’s impossible to to get what we want immediately. Sometimes we have to wait for what we want, and sometimes we just don’t get what we want, period.
So why do we let our children have whatever they want? Say no to your kids sometimes. Let them know that sometimes they just aren’t going to get that new whatever-it-is. This can be a good way to help them be content with what they already have.
2. Save Up for What You Want
Even if you can’t have something you want now, it’s often possible to get it later — if you save up. One thing you can do is teach your child the value of saving money. Encourage your child to save up for what he or she wants, and make it a pleasant experience. This can be a great way to help your child develop a habit of saving money throughout his or her life. Being able to save up, and pay with money already in hand, can be a source of pride, and you need to encourage that.
3. Credit Cards are Loans
Too often, we think of credit cards as representing “our” money. It’s easy for kids to think this way, too. However, a credit limit of $3,000 doesn’t mean that you “have” $3,000. It means that you can borrow up to $3,000. This is a lesson vital to the financial well being of your children. Credit cards are loans. If you carry a balance, you are paying interest. Make sure that your kids understand how credit cards work, and that they realize that the money isn’t “theirs.”
4. Hard Work and/or Innovation Can Mean More Money
Don’t forget to teach your children the value of hard work and/or innovation. Whether your child is working harder or smarter (or both), he or she needs to understand the value of earning money. It’s important that they be given chances to earn money while young, and learn to like the feeling of working for what they receive.
5. You Don’t Have to Get Paid for Everything
Finally, I think it’s important that children learn that money isn’t the be all and end all — and that it isn’t the only measure of what something or someone is “worth.” There are some things we do in life because they are the right things to do, and not because we’re being paid. Service and charity should be encouraged. One of the reasons that we don’t pay our son for doing basic chores like keeping his room clean, setting the table, gathering the trash, and dusting is that we want him to learn that sometimes we do things as part of a family. We don’t need to be paid for everything we do, and for every service we render. This is a great money lesson as well.
What are the money lessons you want your kids to learn?
Photo credit: Alan Cleaver