What are the biggest "problems" in marriages?
Kids? Money? Sex? Communication? All of the above? What are the biggest challenges in parenting? Yep, all of the above - except
sex, of course, ‘cause we don't even want to think about that!
How we communicate with our kids and what we teach them about money will define their lives. Heck,
they define ours? How often is communication or most specifically, poor communication, at the root of any problem you may
be having with a friend, spouse, co-worker, boss, or child? Maybe ALL the time?
When you combine both bad communication with bad money habits, you have a recipe for
double jeopardy! First, let's address the bad communication part of the equation. Many parents tend to think that their children
will learn by osmosis, that simply because mom and dad may do something a good way that their children will do the same.
Sorry! It doesn't work that way. You have to educate your children
in all behaviors. Yes, modeling is important, but mostly modeling good behavior is just reinforcing what has been taught.
Equally, modeling bad behavior might reinforce or encourage bad habits. I've written about Parental Hypocrisy, so I'll let you read that column to learn more on that
subject, but suffice it to say that the "Do as I say, not as I do" idea simply does not work!
So, if mom and dad are good savers, good budgeters, and know
how to balance a checkbook, that does NOT mean that the kids will just pick it up by observance. They have to be shown and
taught. There are many money games available, many online websites that can help, and classes that might offer instruction.
But, nothing is better than teaching your kids your best practices when it comes to money.
After writing 25 columns for 12Most.com, I got to enjoy doing lists. So forthwith
is a short list of topics, ideas, and suggestions for communicating good money skills and habits to children:
Allowance: allowance should never be
an assumption, a given. Allowance should be earned by regular household chores and obligations. If those chores and obligations
are not met, there should be deductions to their allowance JUST as there would be if they did not show up for a regular job
or did not complete a free-lance assignment-for-hire.
Allowance: A separate allowance idea, when kids are beginning to read and especially if they love to read as
my boys did for a long time, is to provide a summer book allowance. It should be a weekly amount that is just enough to buy
an inexpensive book, but not enough to buy a special book. This then teaches them to save a couple weeks or more worth of
their book allowance to buy the more expensive book. With my boys, the older one "got" that idea sooner than his
younger brother. When the younger brother saw the more expensive book his older brother saved for, he then understood the
value of saving. Win-win. They learn about money and they're encouraged to read.
Christmas and Hannukah: Kids need to learn that the world does
not revolve around them. So, when these big occasions come around, teach them that some of the presents go to dad and mom,
other family members, while some presents/money is allocated for those in need. With Hannukah, it was simple because it's
an eight-day holiday. We designated certain of the days as days for others. While this is not a explicit money lesson, it
is one that combines the value of money with the value of giving.
Saving and Delayed Gratification: Everyone, dad and mom included, should know the
value of saving and the reward of delayed gratification. Parents can teach both to their children by showing them the things
they are saving for - a new car, a new computer, etc. and give them an idea of how they're saving for such items. Show how
a paycheck or a gift of money is put into different places such as for bill paying and for that special item that requires
an accumulation of savings. For littler kids, the separate jars idea often works: one jar for spending, one for saving for
something bigger, and another for charity/giving.
ATMs, and Bill-Paying: Let the kids come with you to the bank. Explain what a deposit is. Have them press the
buttons on the ATM and ask them how much money they think YOU need for a week's spending or a week's groceries. Have them
sit with you when you pay the bills. Let them see how much it costs to "run" a house.
Checking the Restaurant Bill: Give the dinner or
lunch bill, when it comes to the table, to your kid(s) to check and review for addition mistakes, deletions, or errors. Have
them pay with your cash or credit card so they begin to learn the process. Ask them to figure out the amount of a tip and
what your family believes is the right percentage for a tip. Teach them - perhaps - that "we" don't order drinks,
coffee, and such out at a restaurant because the cost of those drinks for a family of four is expensive. That's what we do.
The above ideas are just the beginning to your kid's education
about money. I will continue this subject in a future column, let's say "Part Two," but I also welcome your ideas
for great savings games, habits, and lessons to impart to our children.