Teaching our children how to budget money today is very different than it was 30 years ago. When I was little, my mom put cash on the kitchen table and separated it into simplified piles: one pile for the house payment, one for the electric and cable bills, one for food, one to save, and then one final pile for what was leftover. This would be the pile we could use for a special activity like going to the movies or maybe a new pair of sneakers we wanted. It was easy to see and understand. We were always told cash was king!

piggy Bank

Today this lesson is very different, although the basics of budgeting are not. Some children have never seen cash; the plastic debit/credit card is all some of them have ever been exposed to. It is a parent’s job to teach children financial responsibility, especially in times like these when so many financial things are changing.

When my older daughter was in junior high school she came home one day and told me that in her resource class that day they were learning how to balance a check book. She then proceeded to laugh a little and say “when am I ever going to use that?” A wake up call for me! Today, when most younger people come into the bank to open a new checking account nine times out of 10 they do not order checks. Online banking services and ATM’s have made check writing almost obsolete. There is no longer three days to a week for a check to clear. You swipe your debit card and the funds are gone instantly! That is another reason it is so important to teach our children how to handle money. We must teach our children how to live within their means, and to understand how their money is being spent. Here are some suggestions on watching where our money goes and realizing every little bit counts!

1. Give your children an allowance for chores and encourage them to track how they spend and save it. Make it clear that this is the money they need to save if they want to buy something big.

2. Be honest with your children about your family’s budget. Explain to them the costs associated with 100 extra cable channels or an extra 2 GB of data. Let them play a part in discussing non-essential financial decisions.

3. Children will have friends who always have more stuff and the newest stuff. Explain to your children early on that stuff is not what makes you or your life valuable. Show them that experiences can be just as, if not more, rewarding than buying new things.

4. Teach them how credit works. This is one of the most important lessons you can teach them. Show them how interest paid can increase the actual cost of things they buy. Explain how in most cases it may be smarter to wait to buy and save towards the purchase. Back to cash is king!

5. One last tip is realizing how that mocha latte everyday is really putting a dent in your budget. $5.00 a day on a beverage can quickly add up to more than $100.00 a month. That’s a lot of money that could be put towards your big financial goals!

Money can buy many things, but nothing makes you happier than being financially secure!

Carolyn Manfreda-Haines

AVP, Area Branch Manager

Carolyn Manfreda-Haines - photo