Want to teach your children about finances? Not sure where to begin? Kathy Roeser, Senior Vice President and Wealth Advisor from Morgan Stanley's Chicago Complex, has some simple tips. (News Release) Kathy Roeser, Senior Vice President and Wealth Advisor from Morgan Stanley's Chicago Complex, says teaching kids about the true value and importance of money is more than just talk. "Children learn about how to manage money by what they see, hear and experience, and parents have a very strong influence on all of these. Parents have the responsibility to provide their children with learning experiences that will install the proper money management tools for years to come," says Kathy Roeser.
The whole family can talk about money management in Family Council Meetings. This is a time when all family members talk about their needs and wants and what they can afford to do as individuals as well as members of a family.
Kathy also believes that the educational process needs to be started at home as early as preschool. Here are some of Kathy's tips for teaching kids about money management at any age.
Small Children Allow kids to make their own decisions. Even at a young age, from food to toys, let children choose between two or three items. This helps children develop decision-making skills, but also teaches them that there are always limits. Shop with your child and pay for one item. Keep a separate coin purse for their money and have them personally exchange money with the cashier at the grocery store or mall.
Grade Schoolers Give them an allowance. Have them set aside portions of their allowance for real-life monetary allocations such as savings, spending and charity. Give them household chores. Show children that hard work has its rewards. Make a chart of their chores, allowance they received and what they were able to do with their money. Open a savings account. Sit down every quarter with your children to review their saving account statements. Show them how their money has grown from one time period to the next.
Teens Have them set financial goals. Sit down with teens and plan short term and long term goals for both savings and spending. If they want to buy a new i-Pod, show them how they can save up to get what they want. Let them make mistakes. Teenagers understand how to save and spend, but they still may make poor money decisions. If teens have to borrow money, address it as a business situation and write up formal documentation of the advance and charge interest. Allow them to experiment with investments. Have your teenagers watch stocks that they can relate or places where family members work. This also gives parents and teens a topic of conversation.