When it comes to teaching kids about money, rest assured your children are fast learners, especially when it comes to spending it. When kids observe you from day to day they see you spending money because it is a necessary part of everyday life, however there are things we buy that are not part of everyday life, such as when we go to the mall. Most teenagers love going to the mall; they're designed for one purpose - to get more of your money. They are like magnets for your money as they're an environment that feeds into our need to "have it now," a trait of the generation that wants all of the money but doesn't want to do any of the work.
Herein lies the problem: your kids know you have money, but they don't know what you had to do to make that money. All they see is that you leave the house and come back later that day stressed out. Since they don't know what you do all day it just seems like you work too hard.
We have often brought our children into the "spending" part of our lives, but think about how effective you could be when teaching your kids about money if you brought them into the effort part that leads to the spending?
You have to be careful of the example you are setting for your children; will they grow up to believe that using a credit card to buy a luxury item is a viable alternative when you're low on funds? If you don't show your children all the aspects of earning and spending money, you're missing a great opportunity to teach them about money.
Credit cards can be convenient in a lot of situations, but our generation faces the problem of misusing them. Too often our children think paying with credit is not really paying, and this leads to impulsive spending which in turn leads to debt and us losing control of our financial situation. When you realize that the vast majority of young people say they learn their financial habits from their parents, you can see why this is a problem.
Next time your credit card bill arrives, take the time to discuss it with your children. Compare the feeling of buying the item to the feeling of paying for it now. Are you still using the item, do you think it was a worthwhile purchase, etc. Involving your children in all aspects of day to day finances will teach them valuable money skills that will help them later in life.
Nicole Clemow is an international author and speaker and together with her business partner Helene Kempe, they have written many books on the subject of teaching kids about money and how to make it. Visit http://moneytoolkits.com/ and claim your FREE copy of moneySMART$ eMag now.