Does the idea of teaching kids about money feel overwhelming? It’s a big job but definitely an important thing for kids to learn.
As moms, it’s our job to teach our kids important life lessons. Money can be a source of tremendous stress it can give us the gift of security.
I’m realizing more and more that one of the most important lesson I can teach my kids is how to be smart about their money.
Money can be a huge source of stress if not managed well. If managed correctly it can provide opportunities and experiences that can help you live the life you want to live. I want money to be a source of joy for my kids, not stress.
Managing money has not always been my strongest point. I’ve always been good about earning money but holding onto it was another story.
When I first moved out on my own to go to college I learned a valuable lesson about managing my money. I’d saved a good cushion just before heading away to college but being out on my own for the first time was an interesting experience and one car repair and a few grocery trips later I was out of cash.
Seeing that empty balance in my bank account was scary.
I was working at the time but my job paid on a monthly basis so I was several weeks out before I was going to see a paycheck.
I’m not one to ask for help so I didn’t. My parents would have happily sent me money if I had told them but I’m stubbornly independent so I said nothing.
A friend’s mom found out I was living off of ramen and wired me $100. It felt like a fortune and the lesson she gave with it was even more valuable.
She told me the story of when she was living overseas and had run out of money just before an extended bank holiday. She didn’t realize the banks would be closed for so long so she was unable to get money for almost a week. She learned after that experience to always keep $100 stashed in her underwear drawer.
Now I store my emergency cash (and my important documents) in a fireproof safe like this one, I did learn the value of being prepared for a rainy day.
As a mom, I’m hoping to teach my kids some important lessons about money and life before they have to head out on their own.
I HIGHLY recommend the book Smart Money Smart Kids by Dave Ramsey and his daughter Rachel.
After reading it I’m teaching my kids how to be responsible for their own money in a new way.
They recommend allowing kids to make mistakes with money (and life) while they are young and the stakes are low rather than waiting until they are off on their own and the stakes are high.
I’d much rather my kids make mistakes with money now while they don’t have anything more important on their line than a toy.
Right now, while the stakes are low, I’m working on teaching my kids what they need to know about money before they head out into the world.
What I Want My Kids to Know About Money
Money is a Tool
The things money allows us to do make it useful to us, but money by itself should not be the goal. Money is not valuable. Money is only a tool. It gives us security and the ability to do the things we want to do.
We need money, but money is not what will bring us happiness.
Time is just as valuable as money
Time is an important commodity. We only have so much of it and it’s important to use the time we do have wisely. I weigh the value of my time every single time I take on a new project because I know that time with my family is just as important.
Of course, that doesn’t mean we can spend all of our time playing. My dad took three days to drive me across the country when I went away to college. During that trip we did a lot of talking and one of the things that stood out to me was that he said he enjoys going to work because he knew he was taking care of his family.
I spend a lot of time working, and as a mom that comes with a lot of guilt. I have to remind myself that I am choosing to spend that time taking care of my family. I make sure and use my time effectively but the time that I spend working is blessing my kids. I just have to make sure I aim for balance.
A Budget gives you freedom
So many people think having a budget is too restricting, when in reality, it’s freeing. I want my kids to understand that they can either tell their money where to go or let someone else do it for them. Budgeting gives you the power to decide where you will spend your money and where you won’t.
It’s easy to let money slip away on small purchases but those small purchases can quickly add up to big bucks. When you budget, you know where your money has gone and you can tell it where you want it to go in the future. That gives you the power to let money do the things you want it to do in your life.
Save Now. Play Later
As a teen with a part time job, I spent money as fast as I earned it. I wasn’t worried about having money down the road because I’d never known what it felt like to be without money. That experience in college and then others in the early years of marriage taught me the value of saving.
I’m not saying have no fun at all. There are plenty of things you can do that are low cost or free. I’m just saying be smart about it. Don’t spend your money on things that don’t add value to your life. Save whenever you can so you can do better things later.
As an adult, I can now confidently tell my kids that no pair of shoes (or toy) is as worthwhile as the sense of security they will have knowing they have money in the bank. I do encourage my kids to spend money on things that are truly important to them, but I always ask them to really evaluate each purchase.
Money Attracts Money
No this is not some weird advice to get my kids to marry into money. I’ve learned that when you are responsible with your money and treat it with respect you are able to earn and hold onto more of it.
Having money helps you earn more money. Respecting the money you have helps you save more of it.
Honestly, I’m convinced that more than our income level and our family background, our attitude about money does more to determine how much money we have in our bank account than just about anything else. I tell my kids to respect their money and they’ll be able to have more of it.
Do you have any financial gems you want to pass onto your kids?
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