Understanding The Role Experience Plays For Kids Making Money
When kids make money, what role does experience play
? Often as parents we tend to have a soft spot in our hearts for our children and we cover for a lot of mistakes they make. Is this the best method when it comes to learning about money? I say probably not but the question is why?First it is important that kids experience the joy and pain that comes from handling money. Usually there is great joy when kids make money, great joy when they spend it, but no joy when the money is all gone. How many of us have experienced the excitement of the Friday payday only to blow it all over the weekend and be broke on Monday? This is not a good feeling but hopefully it taught you a great lesson. Often the best lessons in life come not from our successes but from our failures. You need to allow your children to experience the same type of lessons. Yes you should teach your children how to budget, but don't always bail them out when they blow the budget. By doing this you can set a bad precedent that whenever I get into trouble, mommy and daddy will bail me out. This may be cute when your child is 5 or 6, or even 14 or 15, but when they are 40 or 50 and the same thing is happening it is not so cute anymore. The next time your child spends all of their money on that PS3 video game and they don't have money for the school trip, let them miss the trip. Sure they may kick and scream and not like you for a while however, the lesson they learn will be one they never forget.
It is also good to allow your children to make money decisions now while their decisions only affect their lives. Parents often make the mistake of managing all of the money for their children and though the intention is good it only works if you are allowing your children some decisions in the process. It is great to tell your children what to do with their money but don't do it all for them. Let them make some choices even though you know some will be good and some will be bad. Some will make them money and some may cost them money but that is ok because they are learning. By the time they are adults hopefully they will know the difference between the two.
As crazy as it sounds when kids make money decisions failure is good and mistakes are a wonderful thing. Obviously no parent wants to see their child make bad decisions but sometimes that will be the only way your child will learn so allow your children to make them. Remember your children don't have to be perfect but they have to grow and mistakes made in the training ground of the home can help lead them to growth.
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