There’s a controversial topic in personal finance that really has no black and white answer.
But if you’re a parent or grandparent, it could be one of the most important concepts for your family. So I wanted to pass along some of the ideas I’ve heard on how to handle it:
How can you teach your kids and grandkids good money habits?
I’ve never met a client that didn’t want to take care of their children… financially or otherwise. It’s in our DNA to take care of our descendants.
Many clients want to give their children the world. Even at the detriment of themselves.
But nobody wants to turn their children into spoiled brats.
So you try to walk a fine line between providing for your kids and grandkids… and spoiling them rotten.
How to find the balance?
Ultimately, I think it boils down to educating your children on the value of money. Education helps you provide for your children… without creating a monster that eats all your money.
I’ve heard some good ideas over the years on how to do this. But each family is different. So it’s important to find a way that works for your situation.
Here’s some clever ways to teach your kids about money:
Allowance, but 1/3 gets saved/invested, 1/3 get spent, 1/3 given to charity of their choosing
Allowance, then 20% interest paid on money not spent
Make them pay taxes or rent on allowance money earned (Set it aside for college)
Buy them only what they NEED. Gifts at holidays or birthdays. And make them work for what they WANT
Invest it with them
No pure allowance. Make them work for their money but match every dollar they earn
As you can see, some of these ideas are pretty creative. And they can teach your kids valuable lessons about money. It’s okay to try a few ideas to find out what works best. Experiment a little, if you need to.
Is this a challenge you’ve had to deal with in your life? If so, I would love to hear how you tackled it.
If you’ve got any creative ideas I could steal, send us a message and tell us about them. It could be a single sentence or as long as you like. Tell me about your successes, your failures, pitfalls you had to avoid, etc.