Kid's Personal Finance Skills Come From Parents

[jeffrey]

Capital One's annual back-to-school shopping survey reveals that half of the teens want to learn more about money management. They especially want to learn more in the areas of budgeting, checking accounts, saving money, investing and financing large purchases according to the survey.

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Don't expect your children to learn about personal finances from their friends or at school. Most studies show that parents are the key teacher for what their children learn about money. These surveys also indicate that children prefer to learn about money matters from their parents. The Capital One survey said that teens were willing to listen to their parents when it came to money and how to handle it.

It's well worth taking the time to teach your kids basic financial skills that they can use later in life. Simply giving them the basics and as much as you know will place them ahead of many of their peers. Personal finance and basics about money is one area you can't rely on others to step up to give your kids a solid foundation.

[mahon73]

Re: Kid's Personal Finance Skills Come From Parents

Children learn what they are taught. Schools do not teach our children about budgeting their personal finances. Parents need to step in and explain what should be done. A big problem may be that most parents probably don't know how to budget or keep their personal finances in check.

[HalMd]

Re: Kid's Personal Finance Skills Come From Parents

Maybe you can help me with a question. My family hardly talked about finances at all, which I regretted later in life. So, I want to be more open with my children.

How do you address topics like salary, net worth, and home value? On one hand I want to be able to speak freely, but on the other hand I'm not sure its good to throw these numbers around with children.

Does it have to do with waiting until the right age? Or, am I just programmed into avoiding these topics because of my own upbringing?

[mahon73]

Re: Kid's Personal Finance Skills Come From Parents

Children probably wouldn't understand topics like net worth and home value until they are older. But salary is something they probably can start to understand when they are younger. If your children have an allowance or something like that you can start to discuss that idea with them. You can explain you work and you get paid (your allowance). Hope this helps.

[HalMd]

Re: Kid's Personal Finance Skills Come From Parents

My question is, do I:

A. Tell my kids my salary openly and unconditionally.
B. Tell my kids my salary with an understanding that they are not to discuss it with their peers.
C. Do not tell my salary to my kids.

[mahon73]

Re: Kid's Personal Finance Skills Come From Parents

In my opinion I don't think your children should know the amount you make. Just the idea of what a salary is. You go to work, and because of that you are getting paid. Essentially, you get paid for doing your chores.
Hope this helps.

[fairy74]

Re: Kid's Personal Finance Skills Come From Parents

I think explaining the basic definitiion of the term and then using small hypothetical numbers is fine. I also do not think children need to know the exact amounts you make.

[cicy33]

Re: Kid's Personal Finance Skills Come From Parents

My question is, do I:

A. Tell my kids my salary openly and unconditionally.
B. Tell my kids my salary with an understanding that they are not to discuss it with their peers.
C. Do not tell my salary to my kids.

C without a doubt! I am sorry and perhaps I am the minority here but it is not a kids business how much money I make. However, you can still set up a budget with a specified amount of money to pay the budget. They do not need to understand whether it is the amount you make or not. You can teach a child how to budget and balance a checkbook without using your money. You could even use a fake budget with fake money if you wanted. I just feel that we as adults earn the money for not only working but being away from home, working at home (that is where the extra comes in! lol) I taught my daughter from the time she was small what we need to pay and if we had enough but I don't think she understood that it was my paycheck amount. As she got older she simply accepted if I said there was not enough left after the bills were paid.

[PrincessPerky]

Re: Kid's Personal Finance Skills Come From Parents

B.

If they are old enough for odd math....though I think sharing with kids should wait till they are past the phase of telling daddy what he got for christmas..three weeks early.

If they are not old enough to keep the number secret (should they happen to remember it anyway) then you prolly need to talk math as if you make 100$ or 1000 a month ...if you know what percent you pay for stuff the math is easy enough for a young kid, if not guess, it wont hurt so long as they know it is an example.

Now why I feel honesty is the best policy? because I don't want my kid staring at their savings account thinking "wow" that is a ton of money, I want them to see it as 'a months rent or a months pay, or a cheap car, whatever..if they spend their whole life with nice rounded easy math the real world hits hard...and why wouldn't I let them know about my budget? I am proud of it.