Teaching Kids About Money Management (Part 2)

Although we never want to scare our children about money, I believe that open, honest conversations about the way we spend our money teaches our children to make better choices.

The other day my husband was at the grocery store with our daughter. When they were checking out she asked her dad when she could have a credit card so that she could buy anything she wanted. (Editorial note - my husband was actually using the check card, buying groceries on the credit card is a sure-fire way to take on unnecessary and unwanted debt!) My husband explained to her that using a credit card didn't get you anything you wanted. When he signed the card it was his promise to pay that money back.

He also talked to her about the difference between getting things that we want and getting things that we need. He told her we need groceries so we regularly spend money on them. My husband, who has a horrible CD habit, explained that those are things he wants and that mommy makes him save up his money to buy those!

So a quick trip to the grocery store turned into a good money management lesson and now our 7-year old knows more about how to use a credit card than some kids who are 18 years old. Take any opportunity you can to talk to your kids about how to use their money, it's much easier to learn how to do it when they're young than to learn the hard way and have to work their way back out of debt.