I’ll have to admit, I really didn’t “get it” about budgeting until a few years ago. Needless to say, I have had my own financial struggles as a result. I really didn’t realize that my spending was controlling my financial future instead of me controlling my financial future by controlling my money.
The unfortunate thing is that it took me 35 years to finally realize I have been managing my money in the wrong way (I use the term managing very loosely). Although I am very grateful to good friends that did “get it”, and were willing to impart their knowledge and experience to get me on the right path, it shouldn’t take each of us our whole lives to figure things out!
The bible says, “Teach your children in the way they should go, and they will never depart from it.” Now I know this pertains to spiritual teachings, but this same truth can be applied to many areas of our children’s lives, and one big area is managing money. If we teach our children good money managing habits, they will be properly equipped when they go off to college and start their own families.
So, here are some things you can do to help your children learn good money managing habits.
Teach your children that earning is fun
There are few things that give me more joy than to buy my children something I know they will really enjoy. Now, my children are young, but I still try to help teach them that you earn “things” by working, or at their age, helping Mommy or being especially good. One recent example was with my 5 year old.
Dad had an important meeting and Mom was unavailable to watch him, so he went with me. I told him, “Son, I need you to be really kind and quiet during Daddy’s meeting”. I also told him he would earn something really cool if he did his part. Well, my meeting went longer than expected (almost 2 hours), but my son was very quiet and content throughout the meeting (did I mention he is 5!). He did a fantastic job! So, after the meeting, we went to one of his favorite stores and I gave him some money to buy some really cool matchbox cars he liked. He was so happy and I told him that he earned those cars all by himself! There is a great sense of inner pride when you work hard and earn a fair wage, and children feel no different. He knew he had done well, and reminded me of that fact for the rest of the day! 
If you have teenagers, certainly the incentive to earn a few matchbox cars is not going work! However, the same rules apply. My Dad told me when I turned 16 that if I wanted a car, I had to get a job first. He said I would be responsible for gas, insurance, and maintenance, but I had to prove to him I could afford these responsibilities by gaining employment. So, I went out and got a job at a movie rental store and worked there from 16 to the day I graduated high school. My Dad put up the $900 to buy my first car, but I maintained it all throughout high school. Every time I looked at that car, I had a sense of pride and ownership, and I took care of that car in the same way. It is fun to earn from hard work and personal responsibility!
Teach your children to save
One bit of advice I have received over the years is to make sure you “pay yourself”. Meaning, when you budget your money, pay your essential bills first, then pay yourself, then use the remainder for things you enjoy. We can teach our children to do the same at an early age.
I know when I was a kid, I used to get an allowance, and of course this allowance was directly tied to completing my assigned chores around the house. Even at this age, you can teach your kids good budgeting habits. When they receive their allowance, or if they went out and worked and earned some money, you can take this opportunity to teach them how to “pay themselves” first. Take them down to the local bank and open a savings account and tell them that each time they earn money they have to put the first 25% of what they earned in this new savings account. Then explain to them that this is called “paying yourself”. If they owed you or anyone else money, they should pay that money back first, then pay themselves. Then explain to them the fun part! Now that they have met their obligations and saved for the future, they can now go and have fun with the rest of the money! Even at an early age, this will work to teach your children the proper way to manage their money!
Teach your college age kids how to budget!
Now that your kids have had a good foundation in managing their money, teaching them how to budget should be a snap! If you read my previous blog post on Marketing Debt Creation Tools to Our Children, you will know that when our kids head off to college, they will be bombarded with what I call, “Banks behaving badly”. Many young adults graduating college at the age of 22 already have racked up $5,000 to $15,000 in credit card debt before they even get their first real job.
College students can easily learn how to budget. They have some type of income for living expenses and spending cash (mostly from Mom & Dad), and maybe have some living obligations like rent, food, etc. One thing we like about BudgetSketch® is that you can collaborate with anyone you like. Sign your college student up for an account on BudgetSketch®, then set yourself up (Mom & Dad) as collaborators on their account, and work with them to establish an intentional budget plan for managing their money. It will be clear to them, and to you, if they are following their budget plan or not. So the next time you get a phone call with “Daddy, I need more money”, both of you will know if they really do need more money or if they are misappropriating money to their “pizza” budget!
These lessons you teach your children will carry them throughout their adult lives. Teaching them to work hard and to be responsible with what they earn are some of the best lessons we can leave with our children. Mistakes are a necessary part of life, and sometimes the only way we learn, but with the proper foundation, fixing mistakes can be much easier and sometimes much less painful.
Teaching our children also has an intended side effect… It is not unusual for the “teacher” to learn more than the “student” 
Feel free to share your success stories… I would love to hear them!!
