How to Raise Kids to be Wise with Money

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wise with moneyThroughout history, older folk have been worried that the younger generation will bring about the downfall of society.

It never really happened.

But that doesn’t mean that differences between different generations don’t exist. For example, Millenials have been more aggressive in cutting credit card debt than other generations since the Depression started, even though they have substantially lower incomes and bleaker job prospects which should make paying off debt harder. Today’s children still need to be taught good financial habits so that they end up more like Millennials and less like Millennials’ Gen X parents and Boomer grandparents. That’s why I’m sharing a few things you can do to teach your kids about good personal finances:

Make sure they work during their teen years

A lot of teens are having trouble getting jobs these days because the labor market is so crowded, and it could get worse if the retirement age is raised. However, if you teen can get a job and it won’t interfere with sports or other extra-curriculars, you can teach them not only about having spending money and managing it, but also about how money doesn’t grow on trees. By having to work hard for money, they’ll learn to value it and save it!


Give them a meaningful allowance

If they don’t work, they still need to learn how to save and manage money, and the only way they can do that other than nittily saving Christmas checks from grandparents is if they have an allowance (on a side note, paying older children to do chores is bad because it implies that doing house chores is a favor for their parents). Giving them money at regular intervals, instead of when they need it to go out with their friends or buy something, will teach them to save some money for a rainy day. This way, they’ll learn to budget it since they only have a limited amount till they get more money from you.


Teach them about business

Starting a successful business is all about planning ahead: You need to have a roadmap for where your business is going before you even think of a name or make a logo. When my boss started Influence People in 2011, he figured out beforehand how his business would work: He would do PR work for various clients, who he’d meet at trade shows, MeetUp events, and in the office building. From those connections, he would expand his business to meet more new clients, and continue to meet new contacts at shows and MeetUp events. Now, Influence People is up and rolling now and we have many clients.

You can teach them about business yourself if you know about it, but the best way for them to learn is to plan on how to start a business themselves. Luckily, the Secret Millionaires Club is having a contest where kids can submit ideas for starting a business. The submissions need to include how the business will operate and how it will be profitable, and the winning kid will win $5000. you can use this as an opportunity for your kids to learn about business, even if you’ve never started one yourself!

(This is a guest post by Steve Sims. Steve is a marketing and PR professional who currently works for Influence People, an online marketing and blogger outreach consultancy in San Francisco.)

photo by aldrin_muya

Jon the Saver

This post was written by yours truly, Jon Elder. My mission is to help you succeed in your personal finance life. Join me on the journey to financial freedom! You can subscribe through RSS FEED or EMAIL updates. You can also find me on TWITTER and FACEBOOK . Happy investing ๐Ÿ™‚

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