Sunday, August 26, 2007

Teaching Children About Money

Ok. I have a question regarding kids and money. Formerly, I have been of the thinking that kids DO NOT NEED Credit Cards. Cash would be the best and help them "see" how much money they have. Seeing how much cash they had left would help them to spend it more wisely.

I guess I'm living in the Dark Ages, but who carries cash anymore? I know I don't. My kids see me using plastic. For teens, carrying plastic is cool, and you can even get pre-paid debit cards to load teen's allowances onto. Whew! I know we are a few years away from this, but I guess I had my mind made up against Kids and plastic. Now I'm starting to have second thoughts. By the time our kids are old enough, God only knows what we'll be paying with. I guess my point is that Kids need to learn the way the world works under our supervision. They need limits set by us. If they carry cash only, then when they leave home, they'll have no idea how bank accts, ledgers, Credit Cards, etc... work. It's our job to train them in the way that they should go. I guess my parenting needs to step into this generation and develop new strategies! What's your opinion or do you have one yet?

I will say that kids need a foundation of understanding before you give them a pre-paid card. Maybe start with cash until they get the concept and then graduate to a cashless system. I have also heard of an excellent idea to help kids understand where your money goes. Even my kids have started saying, you don't need money, just use your card. I try to tell them that I have to put money in the bank first but they aren't old enough to understand. But, the idea is this: Take 1 paycheck, cash it, come home and make piles of money on the table to represent each bill that you must pay. At the end, you show the the puny little bit of cash left for misc. fun purchases, clothing, entertainment, etc... This helps them visualize that $1400.00 really is not alot of money! To a kid, I'm sure it seems enormous. This system helps the parents of the kids who are begging for stuff and say that you DO have money! LOL!

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