It is your responsibility as a parent to teach your children to be financially responsible. But let’s face it—every parent struggles with this task. Because we want our kids to have a better life than we had, we tend to say “yes” to things that teach them the opposite. Parenting requires a strong will and the knowledge that being steadfast on some issues now will help your children become responsible adults in the future.
I found three simple tactics went a long way in teaching my children to be financially responsible. Once they were college-bound, it became even harder to stand firm on these principles, but in the long run, winning the battles paid off.
1. Learn how to say NO
This word is the most important word in your arsenal of teaching financial responsibility. You should begin using it with the “terrible twos” and amp up its use during the teen years. It is especially important when choosing a college. Don’t let your teenager railroad you into choosing a college that is beyond your financial reach and sends them plummeting into student loan debt. Besides, choosing a college is about finding that perfect fit, not about choosing the most expensive or most well-known. Colleges who are interested in your teen will offer a financial incentive and those are the colleges you want them to attend.
2. Teach them the difference between “wants” and “needs”
This is a lesson that all parents should instill in their children. Knowing the difference between wants and needs will save them from being encumbered in debt. If they learn this lesson they won’t need a credit card to buy pizza when they have already paid for a meal plan in college. It is as simple as asking yourself this question every time you want to make a purchase: do I need this, or do I want it?
3. Frivolous spending has consequences
We have learned recently that students are graduating from college with large amounts of credit card debt. Additionally, they have made poor choices regarding student loans and are unable to find a job that provides the means to repay them. Purchasing things (including a college education) without thought for how you are going to pay for them is insanity. And yet, the majority of consumers make that decision every single day. If you teach your children about the consequences related to frivolous spending, you will be saving them from a stressful life and preparing them to have a strong financial future.
Parenting comes with responsibility. We want our children to be happy, but we should also want them to be financially secure. Adopting these three simple strategies will help you teach them financial responsibility.
Parent college coach Suzanne Shaffer counsels parents in the college admissions process and the importance of early college preparation. As a parent herself, she knows the trials and tribulations—and is out to prove that with the proper preparations, any child can achieve his/her dream of a college education. Her Parents Countdown to College Coach blog offers timely college tips for parents. Her Parents Countdown to College Toolkit provides parents with all the resources necessary to help their college-bound teens navigate the college maze. She is a regular contributor on GalTime.com and ClassesandCareers.com.