Simply Budgets

Today I thought it would be a good idea to look at our ideas on personal money management and what we should teach our children about money and the value they eventually place on it. One of the key issues I focus on when I have my say about money is how little is taught in school about personal money management for life. However it is not any easy thing to teach in school and there are things parents can do to get their children off to a flying start.
Having been a teacher of secondary school students for over 20 years and having children aged 21, 18 and 15, I believe I am reasonably qualified to make some observations about the needs and challenges facing our youth as they enter the world of money.
As it stands, our society seems to assume that when we leave school, we will instinctively be able to manage money. The fact is though, that nothing could be further from the truth. We leave school with very little knowledge about personal money management and with a lot of pent-up desires and aspirations. For years we had been biding our time and finally we have ‘arrived’. In short, as we enter the world of money, we are like potential lambs to the slaughter. I recently heard an analogy that describes what can happen and often does. It goes like this.
When Mr. Money meets Mr. Experience, Mr. Money gets the Experience and Mr. Experience gets the money.
As school leavers, the lack of experience our children have places them at a great risk of making mistakes they will remember and suffer from for a long time. I heard recently that many school leavers are already in debt by more than $15,000 for consumer goods before they reach the age of 20.
We obviously need to help our children find the least painful path to experience! My belief is that there are key ingredients that parents need to install in their children so that they have the opportunity to avoid the mistakes made by their peers and often their parents before them.
I have heard many people say that they want their children to enjoy the things that they never had as a child. There is a major flaw with this way of thinking though. Have you ever noticed that it doesn’t matter how much stuff you get, you never reach a point where you can say you are satisfied?
I think it is clear that perhaps we should stop sometimes and re-consider what our children’s needs really are. I believe that less is sometimes more. I know that not having everything I ever wanted was one of the best lessons I ever had as a child, so I believe the first lesson is to arrange it so that your children work for the things they want rather than getting them too easily.
Teaching your children to work for their money is one of the best lessons they will get in life. They will place much more value on their money and things if they had to work for them. This is a great personal money management lesson that you can teach your children while they are young, they may not thank you now but they will thank you for it later.