The Importance of Financial Awareness in Your Children

Not only is it very important for you to understand the importance of money management and personal finances but your children’s financial awareness is very important as well. It is vital to teach our children sound money management skills early in life. If they don’t learn these valuable money lessons when they are young they will grow up without the ability to handle money and finances.

You may realize the importance of financial awareness in your children, but you may struggle with how to instill these important pricipals. Here are four basic principals to help you teach your children about money.

• Start early, very early - I’m not sure of an exact age but I do know my two year old daughter started learning the very basic concept of money at around the age of 2 years. She is now 3 and 1/2 years old and has started her own piggy bank saving account, which she saves money to take shopping with her mother.
• Lead by example - If you want your children to have sound financial awareness then you will have to show them you really mean what you say. The old saying “do what I say, not what I do” just doesn’t work. Children are led by example so practice what you preach.
• Let them earn money - Gifts are nice but if you are always giving your children money for no reason they will continue to expect that. Give them chores to do around the house to earn money. Right now we let our daughter help fold laundry and put away the silverware out of the dishwasher. We give her a quarter for her efforts and she is estatic.
• Let them spend it or save it - It’s their money so let them decide what they want to do with the money. You can always make suggestions but if they want to spend their hard earned money on a pack of stickers or a toy cell phone, let them. If they want to save their money and horde it away, again that’s their decision.

It’s very important that you take an active role in teaching them these principals. There is very little positive outside help teaching financial principals. The American public schools has very little to do with the teaching of finances and depending on the parent this is good or bad. The television would be the next source of learning and there’s not much positive financial learning coming from the TV.

Teaching your children sound money management skills during childhoood will prepare them for the future. From todler to their teenage years continue to guide them down the right paths. Educate them of all the opportunities avaliable and the consequences of their financial decisions. They will thank you years from now!