Bad Economy = Good Time to Teach Your Children About Money

The last 12 months we’ve experienced:

·        Huge decreases in home prices

·        Huge increases in oil and gasoline prices (now oil prices are much lower than a few months ago, but still way above historical price levels)

·       A huge credit crunch (very hard for people and companies to borrow money)

·        Huge stock market declines (U.S. and worldwide)

 

These are very difficult economic times.  So, why is this a good time to start teaching your children about money?  And, where do you start?

 

Whether your children are preteens, teens, college students or adults, they are exposed in some way to the current economic conditions and they deserve to understand what’s going on and how they can prepare for economic surprises in their future. 

 

Let’s start with SAVING as it is truly the key to surviving tough financial times.  The most important money lesson that your children and you need to learn is no matter how much you are saving it’s not enough!  Repeat after me, and then write this down and repeat it once a day or once a week until it really sticks in your head:

·        Save Early

·        Save Often

·        Save as much as you can and then,

·        Save some more

 

But, why?  Why should your children (and you) save your money?

There are several reasons, but let’s focus on one for now.  You’ve probably heard that you should save your money for a rainy day or you should have 3 or 6 months of salary saved in case you unexpectedly loose your job.

• Our current economic situation is living proof that people who have enough money saved in their “Rainy Day Fund” will be able to weather the current economic storm.
• For those that have really done a good job saving, they can even take advantage of opportunities such as buying stocks, real estate and other investments at drastically reduced prices!
• Even if you haven’t saved as much money as you should have, you can take this opportunity to make sure that your children learn the importance of saving to prepare for their future. 

Most Americans spend, spend, spend and then, IF there is any money left over, they may save it.  But, more often than not, without blinking an eye, when it comes to saving versus spending, we use one of our favorite excuses such as:

1.  This is a bad month (car repairs, home repairs, medical bills)

2.  You only live once, so go ahead and splurge on that flat screen TV, designer clothing or shoes, high tech cell phone, or even a new car.

3.  I don’t make enough money to save any money

4.  I hate being cheap or having other people think I am being cheap.

 

Do any of these sound familiar to you?  Of course they do.  It’s part of our culture to spend, spend, spend.  That philosophy is reinforced every day with advertising all around us.  You have to be very strong and determined in order to start changing your habits when it comes to money.  NO MORE EXCUSES!  🙂

 

Your “homework” until we meet again is to sit down with your children and review how much they are spending and saving.  You may want to share some household expenses that you pay and how much money you are saving everything month.  Then, together you can make suggestions about how to save more and spend less.  Write your answers down and make a monthly goal, so that you can measure your progress over the next 6 months.

 

For more money education, visit http://www.moneylessonsforlife.com  Money Lessons for Life teaches children, teens and adults about money with School Assemblies, Classroom Workshops, Money Field Trips, DVDs and Individual Money Coaching.