Raising financially responsible kids is important and yet, there is little advice out there on how to do it.
Not once or twice has the media trended with stories of kids who irresponsibly blew up their entire tuition money. Or children of famous people who spent their parents’ money in ways that the public termed as ‘foolish extravagance’ or ‘spoilt’.
Just a few months back, Fox News presented a story of a college student who blew a whole $90,000 college fund then went on radio to blame her parents for her questionable behavior.
During the interview session on The Bert Show on an Atlanta FM-radio, the female student fervently blamed her parents for not teaching her how to budget better. The social media was outraged by the young woman’s act, with some questioning her character and others claiming that she was old enough to make wise decisions.
Now, the public to some extent might have been right to judge the 22-year old student; but she was also right to blame her parents. Truth be told, it all narrows down to her upbringing. Maybe if her parents had taken a little more initiative to coach her better, she would not have done what she did. No one really knows the inside story of this college student and her parents; however, the fact remains that many kids in the current generation are turning out to be ‘spoilt brats’.
No matter how tall your grandfather was, you have to do your own growing. – Abraham Lincoln
Is it because they are not brought up right? According to a survey carried out by PNC Wealth Management, many wealthy parents still spoil their children despite the belief that they should make it on their own. These parents admitted to giving their kids the luxurious life they wanted; from cars to cash to exotic trips around the world.
Parents should take the lead
It is only human to want to offer your kids a good life, maybe even better than you have had yourself. However, be careful how much financial support you give them because the long-term results might end up negative. It is the wish of every parent that their kids grow up to be financially independent and responsible. If not the world will start witnessing cases of grown-up men and women still living with their then old parents and depending on them for upkeep.
The Millionaire Mind by Thomas Stanley is a book that explains in detail how continued financial support creates a negative impact on the young offspring. Finance experts from Wilkins Finance agree that wanting the best for your child does not necessarily mean allowing them to have everything they want and desire. You have to take charge as a parent and show your children that you know better.
How to keep them on the right track
1.Create an allowance policy
While many parents may argue the real essence of allowance, it is one way to teach your children the cycle of money management. Once you have decided on an allowance policy, stick to it and make it consistent. Your children will have a number of lessons to learn from it. One, they will learn to prioritize their needs, given that they will always be anticipating for a certain amount of money after a certain period of time. They will even grow smart enough to have a plan or budget on what how to use the allowance each time.
2.Encourage them to save
Sometimes your child will ask you for something that their allowance might not really cover. So what do you do? Do you just give them? Well, you could, but sometimes make them sweat for it. Not sweating in the literal sense but by saving up for what they want. Let us assume your son has asked for a bicycle for the summer season; make him start saving early for it. The allowance you give him might not allow for significant savings so you can top it up for him. But ultimately, he will have learned a lesson, and he will even value that bicycle more than he would have if you had bought him with your own money.
3. Teach them charity
As you teach your children how to be financially stable, also teach them about the power of generosity. They need to learn compassion and how to give back to the society. Imagine raising your child the right way for so many years only to be disappointed and frustrated in future because they cannot help you. Not that they lack the finances; but because you failed to teach them that one virtue of kindness.
This article has been republished with permission from Modest Money.