Wrong Tern Finances

As our economy worsens, our own personal finances get tighter and many of us become concerned with our finances. Instead of trying to hide this from our children and shelter them from these worries, it’s the perfect opportunity to begin teaching them about finances, budgets and how to save money.

Many parents are hesitant to discuss their personal finances with their children. They may feel that discussing finances will burden and worry them. Or maybe they want them to just focus on studying and school work instead of worrying about money. However, it’s very important to teach children about personal finances. If they grow up not having a good grasp of how to handle money, they are more likely to run into serious financial problems. There is a greater risk that they will be unrealistic about their future income, which can lead to several problems. They will be more likely to take on higher student loans than they will be able to pay off. This is also true for the amount they spend or borrow for cars, apartments and/or houses, cutting into their future savings, retirement and financial security. Taking on extra credit card debt and paying only minimum balances is another high risk they run. It is essential to teach children about finances and how to save money to prepare them to be financially responsible adults.

There are many things you can do to educate your children about personal finances. When they receive money or allowances, have them begin saving a part. Talk to them and explain to them why this is important. Have your children watch you pay your bills and let them see your paychecks. Show them how you budget your money. When your family needs to cut back, include your children in the discussion. It’s important for them to learn how to handle financial difficulties. Also, ask them for suggestions of ways your family can save money.

The benefits of teaching your children how to save money and about personal finances will carry throughout their life. Adults who learned about finances growing up are more financially savvy than adults who were not taught this as children. These children grow up into adults who have a better understanding of money and a more entrepreneurial mindset. So begin teaching your children how to save money today!

By: Gina E Clark

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