I love New Year’s resolutions. One of mine was to read two books per month. I’m happy to say that I’m on track with it, largely because I eliminated one of my own biggest mistakes: choosing not to read when presented with a choice. I’ve done a better job of picking up a book in lieu of the phone or TV, and I hope to make this a habit. As I thought about this, I thought it might be helpful for me to identify three key mistakes that you may encounter in your journey to raise money-smart children, particularly if you’ve made it one of your New Year’s resolutions.
1. Waiting – The most obvious mistake is NOT doing anything. If you’ve read this blog before, this should come as no surprise. One of the recurring themes is that you just need to get started teaching your kids money smarts. It’s a big mistake to wait for that perfect time. Here are some reasons why you should start financial education for kids today. And more … and more … ok, you get the point.
2. Not Giving Them Control – This is an issue I’ve experienced first-hand. The primary reason to start an allowance is to give your kids money to control. It’s not, in my opinion, to get them to do chores. I’m not sure that approach is the proper motivation. You can read about allowance and the motivation/chore debate courtesy of this great, short piece by Karyn Hodgens at Kidnexions & Family Math Night. Kids need control so that they can make their own mistakes. Making mistakes is a great way to learn, and spending their money on something frivolous now at a very low price point provides a huge teaching moment for you. It’s certainly better than having your kids learn via a much tougher lesson due to making a much bigger financial flub down the road. Essentially, it’s a mistake not to give them a chance to make their own bad choices when they start using money.
3. Lack of Goals – Setting goals is largely the domain of the Save jar, but goals can be relevant to the Share jar as well. But one thing is clear: WITHOUT a goal in place, the likelihood to save diminishes. When your child chooses a goal and affixes a picture of that goal on his or her jar to visualize it, he or she is much more likely to achieve that goal.
I hope that you can learn from the mistakes that I and others have made and can get started teaching your kids good, solid money habits today. Let me know how it goes. Good luck!
Chief Mammal @ The Money Mammals