When it comes to money parents know best

Many people name their parents as the primary teachers of financial habits. Unfortunately, many parents find that teaching their children about money is challenging at best. As America’s funniest father Bill Cosby puts it “…ever since the first child crawled out of the slime (where his mother had told him not to play), children have had just one guiding philosophy and it is greed: Mine! Mine! Mine!”

As with any difficult and necessary task, the earlier you get started, the better. Allowing children to make financial mistakes while they are young is much safer than sending them out to learn from the school of hard knocks. This Father’s Day, make a pledge to address this important life skill; raising a financially independent child could be the best gift you ever gave yourself. Following are some tips that will help your children get off on the right foot financially.

  • Involve them in financial planning. While a young child won’t understand investing at the complex level of an adult, a savings account in his or her name will help them understand the basic benefits of saving money and watching it grow.
  • Give your child a chance to be in control. If you give you child an allowance, let him or her be in charge of spending it. This is a great way to teach the relationship between their actions and the positive or negative consequences that follow.
  • Provide extra income opportunities. Help them learn that money is something you earn, not something you are entitled to. This is also a great way to get the child involved in extra family chores.
  • Take your child shopping with you. Explain to them why you make the decisions you make while shopping. By showing them the details you take into consideration, you’ll be teaching them how to be a wise consumer.

Finally, examine your own attitudes about money; this is extremely important because your children learn more from what they see you do than from what you tell them. Remember that mistakes are part of the learning process. In his book Fatherhood, Cosby writes, “For just one Father’s Day, I would like the kids to forget about the underpants, the tie, and the tin trophy saying WORLDS GREATEST FATHER and instead surprise me with a Mercedes.”

Kim McGrigg is the former Manager of Community and Media Relations for MMI.