As parents, our initial gut reaction is to rescue our children. While in many instances, this can be a good thing. When it comes to money, it is usually better not to step in.
Kids need to learn from an early age that managing money is their responsibility. Not that mom or dad will bail them out if they don’t have quite enough. Unfortunately this financial reliance on parents doesn’t always go away as children grow. When it comes to money matters, you usually need to teach them to be independent.
No doubt kids learn quickly that money can buy them all the things they want. With an immature system of desire, kids want it all. Give them a little money and they tend to spend it.
In order to teach kids to value money and use it wisely, parents need to allow them to make mistakes and fail. If we bail them out every time they overspend, then they will only learn that “when I need more money – I call mom or dad.” At eight years old this may not be as big a deal. But, when your 25 year old calls to tell you he’s been kicked out of his apartment because he spent the rent on the newest, coolest cell phone, it is a bigger deal.
Kids, and some adults, need to learn the process of restraint, the ability to evaluate a purchase, and to research options. They need to learn to save for things they can’t afford and plan for their day-to-day expenses. The best way to teach them is to: provide the means, the tools, and then step back and watch.
Even something as simple as loaning your kid a couple bucks on next week’s allowance can be a mistake. Start today and stand firm to the pressure. Don’t let them whine their way into your helpful heart. Stop bailing your kids out of a financial bind and you will be thankful you did into the future.
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