Many of us discover a little too late that when it comes to money and finances we are ill-equipped and lack the education we need. In important matters as these the earlier you start teaching your kids the better. Children should be taught responsibility, remuneration, and resourcefulness at an early age. So what we want to do is teach them these simple but valuable lessons:
1. You Have to Work to Earn Money
Teach them that in order to have spending money they have to spend time working. Work teaches them to be responsible individuals and helps them build self-worth.
2. It Is Wise to Be Resourceful
Point out the difference between spending their money on what they think they should and what they actually could do with it instead. For example when my 7-year-old would want to buy and expensive zoo set I would point out that we have all the animal toys we need and we could use the Lincoln logs we already have to build the set ourselves. This would give us something to do and would prove more rewarding than just taking something out of a package. The money could be used for going on a desirable trip or be donated to an important cause that the child is passionate about.
3. Learn from Small Disappointments
Teach them the value of money and let them make their own decisions with their hard-earned dollars. Even though they will be making mistakes we need to allow this to happen. Learning from the small mistakes when they are young will help them avoid the big ones when they are grown. The small disappointment from wasting their money as a result of a poor choice could save them from a bigger disappointment in the future.
In the long run it is less painful to learn these principles earlier than later. Teaching our kids to be financially responsible prepares them in a practical way to face the realities of life.