Reading the Wall Street Journal’s Sunday column “Yoder & Son” shed light on an incredible easy and effective parenting tip on helping your kids understand personal finance – Let You Children Take Care of It.
Like many, Steve found out about a monthly recurring errant transaction on his son’s checking account statement and started calling the bank when he realized that it was the perfect opportunity for his son Issac to have a money lesson. So instead of taking care of it himself, he just told Issac about it.
The end result? Issac got nearly all his money back despite being turned down several times and learned a few lessons:
- Never trust someone else with your money.
- Banks make mistakes with your money, and most of the uncorrected ones benefit them.
- Always check your bank statements.
- If you are right, being persistent will lead to your (the right) way.
On the other hand, if his dad took care of it, he would learn:
- Nothing.
As parents, it’s understandable to help your kids take care of all these problems but next time the opportunity presents itself, stop in your tracks and let them do it. They will learn much more doing it themselves than you ever will taking care of it for them.
Below are a list of a few things you may be helping your children do. Let them start managing it with your supervision. Like the old saying goes – Practice Makes Perfect.
- Taxes
- Managing Banking Accounts
- Errant Charges Handling
- Finding a Way to Pay for Tickets (parking, traffic violations etc)
- Give Them the Freedom to Choose
It’s okay even if your children make mistakes. We learn from mistakes, and so do they. If we never even allow them to try when the consequences are arguably lower, how are they supposed to learn so they don’t make them when they are on their own?
To not let them do it themselves is robbing them of the opportunity. Stop doing everything for them and start today.
{ read the comments below or add one }
“Errand charges”. Errant?
This post has been featured on the 89th Carnival of Money Stories at Retire at 40.
Great idea to let your kids take care of (what is essentially) their own problems. We can only learn by doing, not by listening.
I totally agree. My parents opened a joint savings account for me since I was old enough to count and know that money could buy stuff. After many Chinese New Years, I’d give her about all but $10 from the money collected through red envelopes. Up until high school, I accumulated about $500 and I just gave all of it to my mom because I know it is actually their money (since envelopes are exchanged, my parents gave money away also).
My parents trusted me and my sister to know what to do with our money and we grew up to be quite cautious about how we spend it.
I would also like to point out that parents don’t have to wait until their kids are teens to teach them. Case in point: my wife and I recently took our kids to buy apples from a local orchard. Our oldest daughter (4) asked why we had to pay money for the apples- “why can’t we just pick them from the trees and take them home?”
I explained to her that we pay the people who own the orchard money in exchange for the apples because they did all the work growing the apples, and it wouldn’t be right to just take them. I also explained that the money we give them helps them to buy things their family needs.
My wife and I aren’t the type to constantly prep our kids with flash cards or anything, but we believe in using these teachable moments as provided by our children.