Accounting, Personal Finance - Saturday, July 12, 2008 19:27 - 0 Comments

Parents’ Money Management Affects Children

Children learn by watching others.  Who do they watch more than their parents?  As parents, we need to be careful to put our best foot forward in matters of money in order to give our kids a healthy start in that arena.

Children who spend money without considering what consequences it could bring are usually raised by parents that act the same way.  It would not be wise to teach children that money is simply a means to an end.  Instead, emphasize that money is important for physical necessities like food and shelter but is not the most important thing in life.

The respectful use of money will help ensure that money is always available when necessary.  Money problems are the main cause of arguments for married couples, and parents with differing backgrounds will usually have even more difficulty seeing eye to eye financially.  In order to prevent children from being affected by such issues, parents need to come to an accord on how they will care for money matters as a family.

Learning to save takes time even for parents.  We didn’t all grow up with money-savvy parents.  But now it’s time to break the cycle of overspending and debt.  Parents can take a money management class or read a book on the subject.  As they learn, so will the children.  The information can be shared at family meetings.

If the family doesn’t have a financial plan, start one.  Gathering the family together to do this is another way to include children in financial decisions.  Being part of a family meeting shows children the role money plays in the home.  Family meetings can be a place to voice any concerns about money and to find answers together.

My parents never had excess amounts of money while I was growing up, and I spent everything I made on stuff I wanted when I started working.  Despite working hard, I spent my earnings in an effort to not feel like I was missing out on anything.

When I became an adult, these same practices presented me and my family with financial difficulties.  Although my parents were not wrong, they could have been more right by allowing me to be part of financial decisions or at least talking to me about money more.  I just had to go with what I saw as the truth about money.

Teaching children about money is certainly preferable to simply leaving them alone to figure out financial things.  Let children be part of conversations on big financial adjustments in the family so they know how things will be handled.  This does not mean, however, that children have to know about every little decision you make regarding money.

Childrens view of money can definitely be affected by how their parents choose to handle it, for better or for worse.  It is important to remember that kids are always watching, so let them see good financial practices that they can learn to imitate.