Are You Setting a Good Example About Money to Your Child?

Personal Note: I believe the area of personal finance encompasses our ability to positively influence those around us – especially younger ones, who are in the process of forming life-time financial values. At times, they even offer us great opportunities for self-examination as we’re almost sure that their actions are based on what they see in us. In this article, Nicole explains ways of setting good examples about money to our kids, as well as all kids we’re privileged to be a source of inspiration to.

By [http://ezinearticles.com/?expert=Nicole_Clemow]Nicole Clemow

Children learn by watching adults. "Do as I say, not as I do" is an excuse for poor behavior. Ensure your child models good spending and saving habits from you as they will set the stage for good money sense in them.

How to be a smart consumer is a lesson your child needs to learn. Sit down together and discuss the concept of needs vs. wants. This can be more difficult that you think as defining the essentials can be complicated. Your child may consider video games a need, because at present they don't have to worry about the necessities. Explain to your child that right now his or her basic needs are met by you. When they grow up, they will have to budget their money to make sure they can afford rent, mortgage, bills, etc.

Allow your children to participate in money discussions. Talk about budgeting, saving, planning for the future, and investing. Kids need to know that these are issues that they will be dealing with indirectly as a child (can we afford a vacation?) and directly as an adult (paying bills). This is a great time to explain budgeting.

If you consider making a major purchase and anticipate borrowing money to do this, include your child in the process and talk to them about debt. Credit cards seem very attractive to kids as they don't see the possibility of mounting debt and high interest rates. Discuss the pros and cons of using credit cards and introduce bank loans into your conversation. Explain to your child how you decide to fund your purchase and why.

Show your child how you maintain a savings account and monitor your investments. Depending on their age, you may be able to teach them how to read bank statements and quarterly reports.

Charity and volunteering are great moral examples. They are also effective ways to show your child the benefits of giving money and time. Contributing to church, charitable organizations, or school functions are all great ways to model giving. Encourage your child to participate in giving as well. Saving change to donate to a hospital or charity that benefits sick or underprivileged children is usually appealing to a young person. They can relate to the issues faced by a peer and take pleasure in knowing that they are helping someone.

Set a good example for your children by discussing money issues and explaining your thought processes when considering purchases. This will encourage them to use this knowledge as they are faced with monetary decisions as a responsible adult.

Ways for kids to earn money is the most recent project for international author and speaker Nicole Clemow. In her search to find new ways for kids to earn money, she has written a ground breaking new book. Check it out here at http://www.waysforkidstoearnmoney.org for your free chapter and other bonuses.

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