I hate money. I don’t hate having it on the rare occasion when I do, and it’s the one thing I would probably hate less if I had more of it. But I hate thinking about it, stressing about it, wondering about the best way to manage it, etc.
But financial experts say this attitude is pretty harmful to my kids — that teaching them about money, and how to deal with it, is one of the best things we can do for them to start them on the right path in life. And given that my five-year-old just asked for an allowance, I found this week’s Wall Street Journal article on “15 Money Rules Kids Should Learn” enormously timely.
One of the most interesting ones, which writer Jeff D. Opdyke talks about in his post for The Juggle, is that kids should be allowed to fail financially so they can learn how to deal with money. The consequences of spending money on immediate wants rather than saving for future needs is an important lesson, and kids should learn it sooner rather than later.
To that end, he advocates letting kids be in charge of their money. In other words, parents can set some limits, but they should be in control of how they spend their allowances or, later, earnings from a job. For example, one of my friends has her kids divide their allowances in thirds — one third to spend now, one third to save, and one third to give to charity. How they choose to spend and save, and what charity to give their money to, are their decisions. That’s something else Opdyke notes — if you include charity as part of your child’s allowance, they get to decide where it goes, whether that’s a cause you support or not.
This could be a painful process if you’re not someone who finds personal finance fascinating. However, these rules will spark some interesting family conversations about values, money and your own spending and saving behaviors. I’m making sure my husband reads it before the first time we press real cold hard cash into our daughter’s eager little hand.