Starting Them Young

Kids today have more money to spend than previous generations. Their attitude towards money will be influenced by their parents, the media and their peers. It is important to start them on the right track since their spending habits as children and teenagers will shape their attitude towards money as adults.

Children who learn good money management skills will have better chance of becoming adults who can make sound financial decisions and not get into money trouble.

However, teaching children about the value of money is more difficult in today's increasingly cashless society since they do not always see money being paid immediately for the purchase of goods and services. And yet it is because we live in society where credit is so easily available that the ability to manage modney is even more important.

But since good financial skills are not taught at school, it is up to parents to develop such skills in their children. But when does one start teaching children about money?

The Good Life

We want our children to enjoy the good life. But what is the good life? Is it having lots and lots of money? A good marriage? An enjoyable job?

Whatever your definition of the good life thought, money plays an important part in it.

However, there are many people who believe that good life is possible only with the 5 Cs - credit card, condominium, car, cash and club membership. This definition of the good life is not only very materialistic, it is also incorrect.

There are those who end up being miserable because they went heavily into debt to obtain the 5 Cs.

Getting into debt and being unable to get out of it, is one of life's greatest traumas. Why? Because it can lead to you losing your property, your reputation, peace of mind and happy family life.

One of the reasons that people often get into debt is because they feel they have to follow what they see as "cultural" requirements. Although they cannot afford it, they spend their life savings and borrow huge sums to celebrate their children's wedding or to spend during festival like Christmas. Spending too much on such occasions is really unnecessary. There is no need to impress friends and relatives this way.

Another problem is that people feel that they have to own the goods and gadgets associated with "modern living" even though they may not be able to afford them yet.

social vices may also lead many people down the path of debt. They get addicted to alcohol, smoking, gambling or drugs.

Not surprisingly the debt trap can also lead to breakdown in family relationships. How many parents have had to disown their children to avoid being harassed by loan shark who want repayment for loans taken by their children?

The good life is therefore only possible when you, not the banks, are in control of your life. You cannot be said to be in control when you are being chased for repayment for the car or credit card purchases.

The debt trap can be vicious circle from which it is very difficult to break away. With the money going off to pay the debts, there will be no savings for the future and you may find yourself working harder but not getting anywhere.

Your child should therefore be taught to manage her money wisely so that she can save and invest for the future. To encourage her save, make sure that she puts aside a certain sum of money every month upon receiving her allowance. Save firs, then spend, instead of spending and saving whatever is left over. There may not be any left over.

The good life is of course much more than being about money but money undeniably plays a significant role, for without it we cannot survive.

An important lesson to impart to our children is that to enjoy the good life we have to be in control of our life and that comes when we are in control of our money.