Kids need to learn money skills

Managing money is a skill we all need to learn. It is better if we start early. Money skills can be learned from childhood.

Once all a kid had to do to become a meaningful adult was to be able to hunt or gather food. As we evolved, children had to acquire farming and do it yourself skills and some more brainy ones, like reading and writing -not such a matter of fact ability only a hundred years ago- and a talent for numbers. All that is not enough today: it is necessary to get money management expertise

How can parents instill the value of money and the ability to manage it in their little ones? An allowance is the best way to teach kids personal finance skills, such as:

  • Living on a budget as they cannot spend more money than they have
  • Put some money apart to purchase something big and learn how to delay gratification
  • Deciding how they are going to spend their money they are making financial decisions.

Even if their decisions are not all wise now, be certain they are learning. They are learning how to survive consumerism and how to tell wants apart from needs; be sure they will be faster to evaluate and take better decisions when they grow. There is an immediate benefit: having their own money and using it as they see fit will increase their self-confidence and sense of independence.

There was once a mother whose children wanted every silly souvenir wherever they went, from museum shops to beach stalls. Most toys would be used very little and she did not like to buy them. She was always beleaguered by lots of "Can we buy this? Can we buy that?" and it never seemed to have an end.Until she gave each child a small note. And she said "This is your money. Buy whatever you want with it." The children went, looked around, and did not buy a single thing. It was different to spend their own money.