Thursday, December 8, 2011

Money Matters for Parents of Teenagers

Many parents are responding to the financial crisis by teaching their kids more about money. They are making sure their children are learning the lessons of today's financial difficulties. 

Most families have made it a priority to teach their children the proper way to handle money. Showing them how to use a checking and savings account was always a normal step in their development. But today it is regarded as a high priority in preparing our kids for the future.

In a recent study, the findings revealed, 58% of parents in the United States report talking more about money with their children in the past 12 months than ever before, and that 92% of parents say they feel personal finance and financial education should be taught as part of the school curriculum. The studies results were surprisingly one sided in the extent of the parents emphasis that their children were being educated in the schools curriculum on matters of money and money management.

Parents wanted their children to be taught the basics of money management and they were willing to work with schools by reinforcing lessons at home. The three elements in money management that they wanted especially taught were those listed here:

1. An allowance or earning money from chores.
This is where parents are the most confused on what to do. All money situations are opportunities to teach. Remember that your trying to solve a problem now but be careful you are not teaching them a bad habit that will hurt them when they are adults. Allowances are the old fashion way we all grew up with. Allowances were akin to charity, their was no work performed. But in my family, there were no allowances. It was Work = Money, when you performed a task around the house you received compensation. It taught that money did not come until work took place first. It was a good lesson that stood with me even till today when I use the same idea on my children.

2. Planning where money is going to be spent.
Yes, even children must learn how to budget their money. When they blow all their money as soon as they get it in their little hands, history will repeat itself if the parents don't step in and teach how to make a spending plan. "Spending plan" is a nicer way to say budget. A spending plan gives a feeling of being in charge of your money while budgeting sounds like work. How you explain an idea is as important as what the idea is.

This spending plan will also encompass lessons that children need to learn how to determine a want from a need. Also the postponement of pleasure now, for a greater benefit later. If you can get your teenager to learn that,
 you are making a major accomplishment.

3. A plan to save money.
It's hard for even adults to know the right amount to save depending on personal circumstances. But with children it is easy. They can just set up a percentage of 25 or 33 percent of their money into a savings fund. It can be in a bank savings account or in a sealed jar where they can't get at it. When they see their money growing it will make them feel a sense of accomplishment and encourage them to do more. This lesson is one that hopefully follows them into adulthood.

All parents hope to that their children can learn these lessons. These lessons have always been the foundation of money management. With lessons and curriculum at school, reinforced with real life lessons at home, our children will have a firm foundation to stand on in adulthood.

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