Inspired by a WSJ article, here are my own pointers on how you can teach your kids to be savvy when it comes to money matters:
Save. It used to be that if you wanted to buy a treat or a car, you dutifully put some money away for months until that happy day came. Now things are financed. This is bad, for obvious reasons. Learn to do without. Learn to sacrifice.
Allowances. I think allowances are good things. That way, if your child wants something, they can put some money aside for it, rather than rely on their good looks with you, or their whining.
Work ethic. If “performance” or attitude for a given week on chores is done poorly, give them half their allowance. It’s important to teach them that there are no free lunches in life, and that the harder they work, the better things are. Teach them to be independent, self-reliant and that half-efforts only hurt themselves.
Extra credit. Allow for opportunities to make extra money, for chores that are once-a-year things, like cleaning out the attic, garage, or raking the five-acre back yard with a hair brush. This way, if they really have their eye on something, there’s a way to show that work ethic, save, and learn self-reliance, all in one.
Attitude. I agree that it’s good to make fun of people who are showy with their wealth, as well as highlighting the tragedy of people who are rich but clearly unhappy (see: B. Spears). The lesson? Money doesn’t buy happiness. It just makes you rich … and unhappy.
Reward saving. This goes in here twice. Make realistic goals about saving that allowance, and then if they reach it, contribute to their savings a minor but not trivial amount.
With effort and consistency, you can teach and shape your children’s behavior towards money that will help them through life, long after you’re gone.
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