12 January 2009

Young People and Money

How do parents develop a healthy respect for money in a preteen youngsters, and on what basis should an allowance be established?

We call it "legal tender," and teaching young people to give this "tender" loving cate is an important responsibility of parents.

The lessons start early whether we want them to or not. Whatever your child's age, therefore, it's wise to plan some strategies for teaching the lessons about money you want them to learn. Pre-schoolers can be taken on shopping trips and given small sums to buy something of their own choosing. Slightly older children can be let in on discussions of major family purchases, deciding how the money is provided to pay for these (assuming you get it honestly). Early on, children should learn the distinction between using money and merely spending it.

All lessons pertaining to money should be positive, constructive. Too often we let our children see us fretting over problems o f inflation and economic shortage. The message we give them is that money is one of the most important than whether they learn to balance a budget. We need to teach them not to overvalue money.

Ideally, we want our children to see money as an extension of themselves, a resource that can go in their place to help others. We want them to realize that they are stewards of their financial resources, charged with the responsibility of using them well. And just as you can't teach your son or daughter to hit a baseball by verbal instruction - you have to put a bat in their young hands and let them swing - you can't just talk about using money wisely and expect youngsters to learn.

The usual vehicle for teaching these values is the allowance. A definition of "allowance" that clarifies all important aspects is: specific sums of moeny given at regular intervals and designed, by mutual agreement, to cover designated costs as well as discretionary spending money.

The sum and the interval should be an agreement based on experience. Have the child keep track of expenses for a few weeks, including regular weekly needs such as bus fare and lunches, as well as reasonable number of "extras". How the child uses the discretionary part of the allowance (morally) must always be a matter of his or her own choice.

Review the amount of the allowance with the child every few months in the beginning, and at least annually with an older youngster. Keep an eye on inflation as well as needs that increase with age. Make sure your child doesn't get too far out on a limb before he or she learns that money doesn't grow on trees.

One of the most damaging mistakes we can make is giving too much. Over giving deprives children of the desire to achieve on their own. We must realize that we are really helping our young people when we don't give them everything they ask for what they have.

Money, after all, is like manure. Spreading it around does a lot of good. If you pile it up it really stinks!

(by Joseph L. Felix, Source: PST Digest)



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