In today's tough economic times it is important not only for us as parents to know how to effectively manage money, but our children also. Why? "The flow of cash from you to your children may be a trickle or it may be a torrent. The control of the spigot and the power of the flow should be determined by you, but in many cases, unfortunately, the child controls the tap." And letting our children dictate how much money we spend and what we spend it on can and will lead our families into financial ruin!
In their latest book, The MoneySmart Family System, Steve and Annette Economides share they managed to raise not one but five financially responsible and independent children. Oh, and they saved 77% of what the USDA said it would cost to raise children. Which proves that while raising a family is expensive, it doesn't have to cost you an arm and a leg. The Economides provide readers with worksheets, personal examples and rules that we can implement with our children to help them manage and invest their money well.
Since, this is a family system, they also provide tips and tools for parents too. As parents and even grandparents, we often feel the need to over compensate or give children better than what we had materialistically. However, this concept only succeeds in creating an entitlement complex that lasts well into their adulthood. And I don't know about you, but I don't want to be one of those parents whose children are riding around in a Lexus or BMW because Mommy and Daddy are paying for it. I want them to be able to drive nice cars because they can afford it without my help and without putting themselves in a financial bind. Thanks to this book we are well on our way to becoming wiser earners, savers and spenders/investors not just as individuals but as a family!
Does your family have a money management system in place?
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I'm the money manager of the family. I wish John was more involved, but this works for us for now.
ReplyDeleteI have just started giving my daughter a weekly alliwance of $5 and I she said she wants a guitar.I looked up the price and it's $20 which is a month of savings for her. I refuse to pay for it or even match her savings because I want her to earn it herself. her grandmother makes it hard for me to teach her anything because she spoils her rotten. but Im not giving up.
ReplyDeleteWe don't have a formal system but we need to get one. I am pretty good at being conservative with our spending but I am sure a system such as this will show where all of the little money is going, and a little eventually adds up to alot so we need to be more proactive.
ReplyDeleteI'm working on it but it's true we must learn these habits when young. A popular Jewish radio host in Los Angeles once said that we send our kids to summer camp to swim, sing songs etc. and Jews send their kids to money camp! I've never forgotten that.
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