One of the most important things to teach children before they move out on their own is how to manage money. The surest way to fail financially, no matter how successful a person is in their career, is to manage money poor. This is definitely not a lesson for someone to learn on their own.

From the time children are young, they should be given the opportunity to learn about how to manage their finances. They need to understand that credit cards are not a free flow of money. They need to understand that checks are useless without funds in the bank to over them. They also need to learn how to save and budget as well so they do not get behind on bills.

A lot of teenagers and young adults feel that living off of their credit card is okay. They apply for a credit card, get approved, and then go and max it out. This is horrible for a persons credit and they will be paying this debt back for years upon years. Young people need to learn to use credit cards responsibly, as a convenience when the money to pay it is already in the bank. Some people use credit cards in an emergency, and while not ideal, as long as there is a plan for how to pay it off quickly, this can work.

It is very important to teach children how to balance a check book. They need to know that they should always be aware of how much they have available in the bank so that they do not bounce checks or run out of funds to pay their bills. Too many young adults fail to plan ahead and set up a budget. They spend too much on non-essentials and find themselves unable to pay for rent or food. They need to learn ahead of time that they have to pay for the essentials first before they allocate money to other things.

Saving up for a rainy day seems to be a lost art these days, even among adults, but it's important for young people to learn the importance of saving. Savings should be a regular part of their budget and should be deposited into a savings account regularly. Everyone should have enough savings to live for at least six months in case they lose their job or have some other unseen problem. Savings also come in handy when there are surprise expenses like car repairs. Too many young adults run into problems and have no safety net. They call on their parents to bail them out, but at a cost to their independence. Beside, mom and dad might have the money available to help out.

Parents should help kids learn to save early. Start with a piggy bank and then move up to a savings account when they're ready. Give them the opportunity to earn money by doing chores. Let them pick out something that they really want to buy and help them establish a goal for saving toward that item. This will help teach them the process of saving. Then allow them to go out and make that purchase once they have more than enough saved up. This way they still have savings left over and it will teach them to not spend all of their savings all at once. Once a child is old enough to understand math then allow them to start using a check book to keep track of their purchases. This will put spending down in black and white so it's easy to see. It also has the side benefit of answering the age old question, "Why do I have to do math?"

Many banks offer pre-paid debit cards for young people. This is an excellent way for kids and teens to learn how to use plastic. They'll learn that a plastic card is only worth the cash behind it. Remind them to keep track of their funds and to be careful with their savings.

As soon as kids are old enough to want something in the store, they're old enough to start learning about money. This is something that all kids should learn as they are growing up. Money management skills will benefit them through their lifetimes and enable them to teach their kids the same skills.

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