Money Management Is A Fundamental Life Skill

Here is why I’m so focused on teaching my kids money management. I have two underlying philosophies when it comes to how I parent my kids. “If I do everything right, in the end, my kids will leave me.” It is my mantra. My goal it to raise our kids to be well-rounded young adults. If I do they will leave me to be independent adults.

My other parenting philosophy is that I only have until my children hit puberty to teach them anything. As soon as they reach puberty, physiologically, they are no longer my child. At that point, they are technically my peer. My equal as an adult. I know what you are saying. In the eyes of society, a 13-year-old child is no more an adult than a five-year-old. But I believe that once they hit puberty, there is not just a physical change that goes on but also a mental and emotional change. If we look back anthropologically, puberty was when a child became an adult.

Parent-Teen Friction

I have often felt that a lot of the friction between parents and teens arises out of this conflict. “Teens think they know everything” “They don’t listen to me anymore” are common refrains I have heard. But I think those comments miss the point. Teens don’t necessarily think they know everything; they think they know enough not to be lectured by a parent that is no longer considered an authority to them, so they tune out the lectures.

And so with those two philosophies floating around in my head, I feel it is my duty as a parent to teach my child all that I think is necessary for them to survive as young adults before they hit puberty.

That doesn’t give me a lot of time. My son will be seven this year, and my daughter will be 5. That gives me about ten years with my son and 12 with my daughter before my role goes from parent-teacher to parent-adviser. And do you know what you can do with an adviser, you can ignore them.

We Need to Teach Life Skills

I can still remember the day I said to myself; I’m done with the University Cafeteria. I need home-cooked food, or I’m going to be sick. Unfortunately, while I had spent hours watching my mom cooking, I had done very little cooking myself. I had a similar situation with dealing with money.

While I had been earning and spending money for years before I left home, and I had seen my parents run the house and pay bills, I can’t say I understood many of the rules. I didn’t know the long-term ramifications of late credit card payments. How paying for a small item on credit would mean I was spending way more when you add in the interest. I had no idea how a credit score under 500 would affect me once I needed a car loan or a mortgage, or for that matter, that I had a credit score and I was systematically ruining mine.

That is not to say I blame my parents. They did a fantastic job of raising my older sister and me. My parents were more open with their financial highs and lows than many parents of that generation were. They were happy to encourage me in my fascination with earning or saving. They were a positive influence in every way you could ask. But like all parents, I hope to add another dimension that my parents did not give me.

Hyper Focused on Money Management Life Skills

Because of my challenges as a young adult, I’m hyper-focused on teaching my children life skills like money management, laundry and cooking. I know from experience that it is not sufficient to merely demonstrate the behaviours, although that is important. It is critical to engage actively and include my kids into the activities that I want them to master before they become young adults. Luckily most children are eager to do what their parents do. So I hope to take advantage of that.

This is why I’ve started an allowance with my son so that he can begin using money. I hope that it will eventually lead to him taking on the responsibilities of managing a budget, such as a clothing budget.

I plan on introducing the concepts of credit and debt to my kids early.  Once they have a solid grasp of earning, spending and saving. But this is also why I cook with my kids, with the hope that eventually they will be cooking full meals, from the purchasing of the materials, the prep, cooking and clean up. And this is why I try to get my kids involved in the home maintenance projects around the house. Because if you are good with money, a frying pan, a screwdriver and a hammer, I feel like you can make it in the “real world.”

As my kids grow, I hope to engage them in even more projects around the house. Have them take charge of budgets, such as clothes or school supplies. Giving them chances to practice money management skills will prepare  them or when they leave home.

Let me know in the comments some of the ways you have engaged your kids in life skills. Do your kids do the laundry? Are your kids cooking for you? I would love to get more ideas that are engaging, productive and fun.

The Gandalf Doctrine: Keep is Safe Keep it Secret.

I love the innocence of my children.  Watching them play carefree is one of my greatest joys.  I truly hate to take any of that innocence away, but when it comes to personal finance, innocence is not the values that I would want to encourage.

As I watched my son walk into the store this past weekend to buy his new Beyblade with his saved allowance, I was filled with pride.  But I was also a little disturbed to see him holding his cash in his hand as he inspected the wears.  While it was innocent enough, and I wasn’t afraid some thief would come up and snatch his money in Toys R’ Us, it was an excellent chance to impart the Gandalf Doctrine on him.

Your money is yours to have until the moment you decide to exchange it for something else I told him.  Up until that moment, it is important to keep your Money Safe and Private (for child safety reasons we have a strict no secret rule in our house, so the term I use here is private).

As I told my son, how much money you have is no one’s business but your own. And you are under no obligation to tell anyone how much money you have.  Nor do you have any right to know how much anyone one else has.

I reminded him that there are people in this world who would not think twice about taking what is not theirs.  And for this reason, he must at all times keep his money somewhere safe.

I’m hoping this will be a good jumping off point to talk to him about:

1. No one has the right to tell you what to spend your money on
2. Where are safe places to keep his money

He took what I said to heart for the time.  And while I am sure at some point he will forget the message, and I will have to deal with a misplaced dollar or worse a stolen bill, that too will be a lesson well learned.  Hopefully, he learns the lessons now, while his money is for “Beys” and not rent.