My parents separated chores and allowance. Everyone was expected to work, and each of us had assigned tasks for which we were responsible. Completing those was mandatory, and work came before play.
We also received allowances. To teach us to manage our income, we had expenses to pay. Whatever was left, we could choose to spend or save.
Our parents opened savings accounts when we were born for depositing gifts of money we received until we were old enough to make our own decisions about what to do with monetary gifts. Saving was their preferred, but not only choice.
Once we reached high school, we were given checking accounts and made responsible for specific expenses. Our parents funded the accounts annually to cover those expenses and provide discretionary funds. We were expected to live within our budgets, and to do that we had to understand the difference between needs and wants. Cost of living adjustments occurred yearly, as circumstances dictated.
When time came for college, the practice continued, and I enjoyed knowing that I had money to take care of my needs. By contrast, many classmates had no experience in “handling money.” Whenever they needed or wanted something, they had to ask their parents for money. They missed out on opportunities to weigh options, make choices, and experience the consequences of decisions made – all invaluable lessons for emerging adults. Others, of course, seemed to have unlimited funds and, therefore, never learned about balancing budgets or planning ahead.
Learning to manage personal finances from childhood is crucial to a successful transition into adulthood. Whatever our financial situation, the more knowledge and experience we gain as we’re growing up, the better.
However we choose to do so, we must make time to teach and model healthy attitudes towards work, play, and money. Children are not born knowing how to earn, spend, and save. Instant gratification is the norm for children. Every want is a need until they learn to distinguish the difference. Let’s commit ourselves to acquiring the tools and teaching our children how to be fiscally responsible. They – and we – will be glad we did.
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