Banking Law

Twelve Personal Finance Mistakes - Teach Your Children Well

By Eugene S. Melchionne, Connecticut Consumer Attorne

And the one they pick, is the one you’ll know by.  (Crosby, Stills, Nash & Young, 1970)  Children are part of the family and while they might not understand high finance, they are sensitive to the stress and strain that an out of control budget will bring on any family. You are not doing your children any favors by failing to teach them about the responsibilities of money and the consequences of spending.

Many of my clients laugh when I tell the story, but when my son was very young, I wanted to teach him about paying taxes.  So, whenever we went out for burgers, I would insist on taking a few of his french fries so that he would ‘pay his taxes’.  It became a running joke, but to this day (he’s 22), he remembers that lesson.  Likewise, when it was time for him to get a car, I didn’t buy him anything new.  Instead, I bought a junk Jeep CJ-7.  I told him he could have the car provided he took it completely apart and put it back together again.  It is a project that has taken a bunch of years, but it’s a beauty now.  From that experience, he learned not only how to repair a car, but he also learned the value of having a car that runs.  You never forget your first car, but this is one I’m betting he will take care of for a very long time.

Whether it is something as inconsequential as french fries, or as major as a car, you can teach your child about finance without preaching or lecturing.  Try an allowance, but require a ledger of where the money went before the next installment gets paid.  And if all else fails, a few french fries won;t hurt anyone.

Full post as published by Debt Law Network on June 02, 2009 (boomark / email).