Teach your children to handle money

It seems like every day there is another news story about adults mismanaging money: pension funds losing billions of dollars, car companies going bankrupt, and banks being nationalized.

It seems like every day there is another news story about adults mismanaging money: pension funds losing billions of dollars, car companies going bankrupt, and banks being nationalized.

Many commentators have complex explanations for the crisis involving exotic stock market tricks. Fortunately there is a simpler answer than that. Too many people lack basic financial awareness. That is one reason why it is so important that you teach your children about money from an early age. Some of the things I was taught about money growing up were:

• Money is valuable and it involves trade-offs when you use money to buy something.

• Money is directly tied to the work you do and your time

• I learned from example that it is always a good idea to have some savings put away .

A simple yet effective way to introduce your child to money is with an age-appropriate allowance. This way they will learn to value their purchases. After your 10-year-old does some basic chores, give him $20. Later, when your child wishes to buy a toy, remind him that it took two hours of housework to earn the money needed for this purchase. In this way, the child will attach value to money and associate it with work and time .

This lesson is still with me. I often think of purchases in terms of how many hours I have to give up through work to buy them. It makes it a lot harder to splurge on a fancy, but unnecessary new cellphone when I realize the amount of work I would need to do to pay off all the costs associated with it.

At some point your child will wish to buy an item that costs more money than they have. This is a great opportunity to teach him about savings and loans. Explain to him how long it would take to save for the item and debate whether or not the item is worth that time. If after considering this he still want to make the purchase, you may decide to loan him the money. Explain that when borrowing money, he is making a promise to pay it back. This promise is a contract and by breaking it he is doing something wrong.

While growing up I kept a bank account of my own and I was always very excited to put a deposit in and look at my monthly statements. This is a great way to encourage financial responsibility in your child. By giving me my own bank account, my parents kept me interested in saving and taught me to be financially independent.

This is by no means a comprehensive plan for your child, but if you teach him financial responsibility as he grows up, you will have set your child on the path to wise money management This will lead to a more financially secure future for your child.

If we are lucky, the next generation of savers will make better choices with their money than some of us did.

Positive Parenting appears every week in LIFE. This week’s column was written by Sean Lafortune, a fourth-year commerce student working at Family Services of Central Alberta. Lafortune can be reached by calling 403-343-6400 or www.fsca.ca.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Canadian officials say more coronavirus cases expected but risk ‘remains low’

The first Canadian patient diagnosed with coronavirus began showing signs of illness… Continue reading

Human remains found in burned Alberta hotel after ice thaws enough to permit search

WETASKIWIN, Alta. — Police in Alberta say that after a week of… Continue reading

Tumour on Edmonton woman’s liver was rare parasite, not cancer

EDMONTON — Cassidy Armstrong says she washes her hands, cleans her vegetables… Continue reading

Man who flew to Toronto from China is Canada’s first coronavirus case

TORONTO — A man in his 50s who travelled to Toronto from… Continue reading

WATCH: Songwriters discuss what makes a great country tune, creative process

Alberta Country Music Awards Songwriters Showcase was held in Red Deer Saturday

Fashion Fridays: The basics you need for your body type

Kim XO, helps to keep you looking good on Fashion Fridays on the Black Press Media Network

Your community calendar

Feb. 1 A Jump Rope Competition will be held at the Abbey… Continue reading

Virus death toll in China rises as US prepares evacuation

BEIJING — A new viral illness being watched with a wary eye… Continue reading

Alberta open to extending Feb. 28 deadline for high-tech panel report

EDMONTON — Alberta’s economic development minister says she is open to extending… Continue reading

‘Supersites’ in Iqaluit, Whitehorse to improve Arctic weather forecasting

Weather matters in the Arctic like it does in few other places,… Continue reading

Canadian Forces sending plane and crew to help fight Australia’s fires

OTTAWA — Canada is sending a military transport plane and about 15… Continue reading

‘There are many degrees of hate’: Quebec blogger takes on far right

MONTREAL — Far-right group La Meute was once seen as a growing… Continue reading

Metis leaders raise concerns about national council, call for reform

OTTAWA — The regional Metis presidents of Ontario, Alberta and Saskatchewan are… Continue reading

Weersink and Kings shutout top-ranked NAIT Ooks

Queens hockey also knock off Olds College Broncos

Most Read