What Advice Would You Give Your Kids?

[kileyj]

My child is still too young to understand anything about money but I was thinking lately about all the things I wish I knew about money when I was a teen and now I think about all the things I would hope my kids would know about money.

I had to pay for college on my own. I was never given a car or had help paying for car stuff. I figure if I did it my kids can work hard and pay for all that themselves, too, but I want to instill in them early on how important it is to save but need to know the rewards of saving. Hard to have kids save, save, save, and never see the fruit of their work until they're 18.

[AngelinaCatHub]

My child is still too young to understand anything about money but I was thinking lately about all the things I wish I knew about money when I was a teen and now I think about all the things I would hope my kids would know about money.

I had to pay for college on my own. I was never given a car or had help paying for car stuff. I figure if I did it my kids can work hard and pay for all that themselves, too, but I want to instill in them early on how important it is to save but need to know the rewards of saving. Hard to have kids save, save, save, and never see the fruit of their work until they're 18.

[Flamingo]

Starting an allowance at a young age (say 6, 7 or 8) of maybe a few dollars a week is a good start. Have them put a portion of it in a piggy bank (or open a savings account in your name for the benefit of....) and explain what you are doing as to saving that portion. The rest is for them to spend on things they may want. The best is when they hit 13/14 to allow them to get a summer job like on a farm or someplace that will take kids that age (my youngest daughter worked on a potato farm as her first summer job for 6 weeks at age 13 and learned so much about work and that paycheck...). It is a great opportunity for them to earn their own money and explain to them how Uncle Sam and the State takes taxes out of the money they earned. They are shocked when it actually happens to them. Little things like that are a good start to where the money comes from, what comes out of it and how to spend the rest. They learn about credit cards from you and shopping - if you go crazy with the credit, they think they can do the same. Take them shopping with you and show them how to use coupons to save money and to compare prices, sizes, etc. to get the best buy and most for the money.

[Mi Bankruptcy]

If you can teach them to save 10% then that is a starting point. However, it only works if they receive money on a regular basis. This is where allowances come in. We pay our daughter 20.00 every two weeks for chores she does. We go to the bank and give her the money and she deposits. 20.00. however, every now and agains she asks for advances on her allowance. I think I may start charging an outrageous interest rate until she pays it back.

[AngelinaCatHub]

If you can teach them to save 10% then that is a starting point. However, it only works if they receive money on a regular basis. This is where allowances come in. We pay our daughter 20.00 every two weeks for chores she does. We go to the bank and give her the money and she deposits. 20.00. however, every now and agains she asks for advances on her allowance. I think I may start charging an outrageous interest rate until she pays it back.

THANK YOU 'Mi Bankruptcy'. A VERY good idea. Pawn shops are about 300% per annum. I would also add to that, "child, you don't know how to manage your money, so interest is the penalty you pay" You could also say "Interest is what you GET if you save." Then tell her or him that if you put five dollars more into your savings I shall match it 50% and give you 2.50 on top of that for your efforts. 'Hub

[kornellred]

That's a real tough question to ask on a bankruptcy forum - even though it is asked in the General Talk area, where almost anything goes.
To a certain degree, children tend to emulate their parents. There comes a time when a child will inevitably become curious about money matters. Then, a parent might explain the basics - what money is, what it is used for.
Then comes the hard part: learning how to get money, and what to do with it once you have got it. That's pretty much what growing up is all about. Kids find themselves in a world that is not of their own choosing, somewhere in between super-abundance and total lack. Their attitudes and dispositions will develop within their unique contexts. There is an old adage that goes 'you can lead a horse to water, but you cannot make the horse drink".
As someone who is in their second bankruptcy, and has raised three children to adulthood, I can honestly say that my relationship to money has always been troubled. An old friend once remarked that I was clueless when it came to money - that if he earned the kind of money that I did - he would be far better off than I was. I was a compulsive shopper. I did not save. I was content to be a renter rather than buy into the American Dream of home ownership. Habits and attitudes that would not serve me well in the long run. My own children could not help but notice. I was willing to allow life itself to teach my children what to do about their own survival. I guess I was clueless about being a parent as well.

But hey - my kids love and respect me. They figured it out with very little help from me.

[woeisme]

I don't know if kids tend to emulate their parents, at least I hope not because I really hope my son learns from what we are going through now!

And my parents were AWESOME with their money. They raised 7 kids on a low-income salary, and never had a penny of debt other than their mortgage. (Our house cost $14,500 when they bought it 40 years ago.) My Mom managed most of the money, the checkbook, the bills, etc, while my Dad was the single wage-earner. Coupons and rebates were kings, my Mom could stretch a nickle farther than you'd believe possible. When my Dad retired his salary was less than my starting salary at my 1st job, but they managed to put funds away into IRA's, savings accounts, etc so my Mom has something to supplement her SS and tiny survivors portion of my Dad's pension. I sure wish I'd learned from them, emulated them, instead of taking the opposite route of trying to "make up" for everything I thought I was deprived of growing up. I got their work ethic at least, but not the "save" ethic, now I'm finally getting it at age 40!

[JRScott]

The best thing is to teach them the value of money while they are young.

Do not give an allowance for an allowances sake. Make it such that there are chores required to get it. As they get older the difficulty of the jobs increase.

When in a store don't give in to the give it to me now. Just firmly state you do not have the money. I know this is hard sometimes, I think its why my brother and his wife don't take my niece with them shopping most of the time. But you have to establish a limit. If you do have a little extra money assign a money value they can get and don't go over it, not even once.

Do not buy them a new car when they can drive. If you buy a car at all it should be an older car about 10-15 years old. They should be required to pay for their own insurance (this means a job) and their own gas (once again this means a job).

After I was a teenager I never got toys/games/etc for Christmas or Birthdays. Gifts were limited to clothing, shoes, etc. Necessities of life. Still works that way today.

[Mark80]

My mom was a huge advocate of controlling your spending. She lectured me my entire life about how important it was to not charge things and to be really careful with money. She saved up cash for almost everything, paid off all her cards during the grace period and still today sticks to her morals.

Here I am 28 and filing bankruptcy.

I'm a father of 2 (soon to be 3) myself I wonder how to get my kids to understand as I never really listened. Obviously how my mom passed it on didn't work, but outside of showing them the way I have no idea how to hit this lesson home.

[Mark80]

now I'm finally getting it at age 40!

This is my feeling, live and learn. This is one of those things that you can try and help with but your kids expecially as they enter their teenage years stop taking your advice with such enthusiasm. I didn't "get it" until last spring when I finally sat down and saw what kind of trouble I had gotten into. No amount of preaching or guidance from my parents protected me from my stupid decisions.

[layla17]

That's great advice 'Hub. I'm actually copying that and saving it for the right time to talk to my kid's about possessions and money.

[JRScott]

My mom was a huge advocate of controlling your spending. She lectured me my entire life about how important it was to not charge things and to be really careful with money. She saved up cash for almost everything, paid off all her cards during the grace period and still today sticks to her morals.

Here I am 28 and filing bankruptcy.

I'm a father of 2 (soon to be 3) myself I wonder how to get my kids to understand as I never really listened. Obviously how my mom passed it on didn't work, but outside of showing them the way I have no idea how to hit this lesson home.

I think being more open about household finances. I mean my dad went bankrupt when I was a teenager. However he never really shared what he did wrong or how and we never really had that much growing up so I'm not sure what led to it other than it was credit cards.

Perhaps the best plan would be to sit down as a family and do a few budgets, so that kids see where the money goes. The downside of this is if you have a lot of extra money they'll know that too.

[Mark80]

You have a good point JR, however my wife doesn't feel the same way I do about being open with the kids on whats going on. She feels they shouldn't be brought into the stressful situation we are in, and being they are just kids they should enjoy their youth and worry about kid stuff.

I kind of push the fact we cannot buy this or that because we are tight on money etc. But have avoided sharing how bad things really are. I don't want them awake at night worried we might lose our home and so forth. Thats what I'm here for.

In any event I think there is a fine line on what should be shared and what shouldn't be. I think kids "could" learn a valuable life lesson, but I also don't know if its worth stressing a 5 and 13 year old out about something I caused.

[Cali]

I have disagree, being taught about money when you are kid doesn't keep you from filing BK. I was taught about investing, saving, paying bills, etc and I still had to file. And it wasn't because I was bad with managing money.

My children(16 and 17) know about money as well.

[layla17]

My older brother was always taught about money management and the importance of saving money growing up, but he still had to file for BK a couple years ago, and his money management skills are terrible. It's the individual's choice obviously. As parents, you have to do all you can to get your kids to learn how to handle money, but there are no guarantees.