In each chapter of all of my books, I provide several key principles to help you teach and implement each concept. These sub-principles are based on a number of universal principles that you should understand right from the start. These principles are as follows:
Talk about it
Maintaining an ongoing dialogue with your kids is the best way to teach them about money. Whenever you introduce a new concept or face a showdown over a money-related issue, the most effective way to address it is to talk about it. Choosing an appropriate time to talk is also important.”
Ideally, start working with your children at an early age, preferably age five or six. If you wait until your kids are in their teens, it will be more difficult (but not impossible) to teach them new money principles and concepts. Stick to the system presented in this book to bring your teens to the skill level they need.
Give up control
To learn about money, your kids have to do things themselves. Instead of handling their money for them, let them do it. Let them make deposits and withdrawals from the bank; let them make their own purchases; let them decide what they want to buy with their own money. You can offer advice, but let them do it on their own. Hands-on practice is the best way to learn any new skill.
Let your kids make mistakes
Even if you think your kids are spending their allowance on the wrong things, let them do it. Do not intervene and take charge. Let them make mistakes. If they mess up, they will learn the lesson much faster than by listening to a lecture. After all, making inexpensive mistakes when you are a child and learning from them is far better than making costly mistakes as an adult.”
Although you need to give your kids money for allowance, for treats on special occasions, and for the purchase of trendy clothes and other stuff, you also have to set limits. You must teach your kids that money does not come pouring out of bank machines. They have to learn to make choices based on financial limits. Even if you have a large income and oodles of money to spend on your kids, they will learn to manage money well only if they operate within some kind of set budget. So set limits.
Your job as a parent is to help your kids express their individuality and creativity within a well-defined structure. This is especially important when you teach your kids about money. You need to help them establish a consistent regime of allowance, saving, and spending. This type of structure will help them learn faster and with more confidence.
©Paul W. Lermitte