This is a question that I am often asked. In today’s society many people are very dedicated to spending time with their children and grandchildren. Good parents and grandparents teach these children vital things like morals, values, honesty, integrity, charity, to help others, etc.
Even better, many, if not most, lead by example so the youngsters can not only hear the words, but also see the action and results.
Money and money issues are no different. The sooner involve children with financial responsibilities, the better chance they will have of making prudent decisions and protecting themselves.
Let’s face it; this last recession in particular had a lot to do with people getting in over their heads. Who, in a normal state of mind, wouldn’t question not only getting a mortgage for more than they could afford, but also getting an extra $25,000, $50,000, or $100,000+ at the settlement table for walking around money? Come on! I guarantee anybody that lived through or around the depression era didn’t succumb to those temptations. Why? Because they either learned the lesson of living within their means because they didn’t have anything or they saw what was going on around them to other people in their neighborhood and across the county back then.
So, talk about money just like you would any other subject. Start with a piggy bank and progress to an allowance, then a prepaid card (which will require restraint), then a checking account and finally a credit card or some other line of credit.
The more they learn, hopefully, the more control they’ll have over their finances as they get older. I know I didn’t pave any new roads here, but I think the basics are all that is needed.
Thanks for the question and have a great New Year!