Teaching your kids finance, do it now or pay up later…
I hate to say this out loud, but I am 30 years old. It is only in the past year I have begun to actually learn how to run my finances properly. I just never learned how and always thought I could figure it out later.
When I was a kid, I loved math. Anything to do with numbers, and I was curious about it all. I remember trying to sit in one night while my mom was paying bills and what not. So me being me I started to ask a bunch of questions.
How much money do you have?
How much do you make?
Why do you pay taxes and how much?
How much is rent?
How much are the rest of the bills?
The answer to these questions? “None of your business, you don’t have to worry about it”. No matter how often I asked, I would always get the same answers. So I got it in my head that my mom would always handle any money issues or problems. I didn’t bother to try and learn more.
I am paying for it now. I didn’t learn what credit was. I didn’t leanr how to use credit properly. I did not know what credit rating was, or what it was used for. I did not know how to tell if I was getting ripped off or over charged.
So when I was younger, I got lots of credit. I basically lived off credit cards and loans. Once they were full, I would consolidate and do it all over again. It is only now that it is all paid off and my credit score is back to normal. All because I was never shown how to use money and credit properly.
So now comes the advice. When your kid asks about money, please tell them everything they want to know. Tell them how much you make. Tell them how much you pay on the mortgage, the card and everything else. Give them a spreadsheet if they need it.
Really, what is the harm in telling them how much you make? Or how much the mortgage payment is? Let them know as soon as you can the valuse of a dollar. Show them your credit card bill and show them the interest charge. When they ask you what that is for, tell them that it’s the cost of borrowing money.
My oldest son is 12. I tell him everything about my finances. He thinks I make loads of money until I tell him to fill up the truck with gas and it comes to $70 for 4 days of gas. It takes him 7 weeks to save that much up.
In short, be honest with your kids when it comes to money. Teach them everything you can, and then encourage them to learn more. Or else later on, they will be knocking on your door looking for a downpayment on a house, or a co-signature for a car, or something else. Then you will have no-one to blame but yourself.
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Pingback by Teaching your kids finance, do it now or pay up later… · Business Card Information and Deals — February 27, 2008 @ 2:12 pm
[...] Foximus Internet Business Blog | How to do everything wrote an interesting post today on Teaching your kids finance, do it now or pay up laterâ¦Here’s a quick excerpt I hate to say this out loud, but I am 30 years old. It is only in the past year I have begun to actually learn how to run my finances properly. I just never learned how and always thought I could figure it out later. When I was a kid, I loved math. Anything to do with numbers, and I was curious about it all. I remember trying to sit in one night while my mom was paying bills and what not. So me being me I started to ask a bunch of questions. How much money do you have? How much do you make? [...]
Pingback by Taxes » Teaching your kids finance, do it now or pay up later… — February 27, 2008 @ 2:38 pm
Great advice!
I remember my parents used to be really stingy with their financial information. If they got a lump some of money it would be a big secret from us kids. It was as if they thought we were going to rob them in their sleep if they told us how much money they had.
Kids are just curious, there’s nothing wrong with that.
Comment by Aimee — February 27, 2008 @ 2:55 pm
nice article, i would suggest to parents that start explaining about finance matters once their child get mature. It will be batter for them to handle such situation correctly.
Comment by Wicked Weasel — February 28, 2008 @ 3:43 am
This is so true! I grew up with parents who worked hard teaching me the value of a dollar and how to plan and budget my finances. My best friend on the other hand was the total opposite.
Now that we are adults I am doing fairly well, including investing for the future and I already have my daughter’s college fund ready. All without a husband. While she and her husband live paycheck to paycheck and borrow money from her parents to pay bills since they spend their other money eating out.
So yes, teach them early, it will keep them out of your pocket book once they are older.
Comment by brackets — February 29, 2008 @ 11:10 am
This is great advice. I always marvel at why there isn’t more talk about how to manage money and take care of finances at a young age. It’s like people are too scared to talk about it. It would help everyone out if we all knew more about money.
Comment by Chris at Home Security — March 1, 2008 @ 2:31 am
Good advice, kids need to know these things. Parents can always make up the numbers if they don’t want their kid running around stating how rich or poor they are.
Comment by NineThreeNine — March 1, 2008 @ 10:30 am
agreed…. if our kid didn’t value about the meaning of the money.. geee.. they would end up massing their parent in the future… kids should now that money didn’t growth on the tree
Comment by reviewlutions — March 15, 2008 @ 1:18 pm