Teach money management early

Money is a subject that almost all people are going to have to learn about at some point in their lives. Some have very good money management skills from the start, while others have to learn the hard way. Because money is something that people need to get by, it is important to start teaching the basic concepts of money management and personal finance to our youth — before they will need to use those skills.

One way that children learn how to manage money is by observing how it is managed within their household. Parents and caregivers can be a very important influence on their children, so it is important for a good example to be set. After all, children are more likely to imitate actions than follow directions. If children see their parents saving money every week or watch them use a shopping list and coupons, they will likely engage in these or similar money management behaviors when they get older.

Another way parents can help their children learn about this topic is to teach them basic money management. This can include concepts like saving and spending. Having children save up their own money in order to buy something they have their eye on can be a great way to do this. This can teach children how to save and that it is not always possible to purchase things the second they decide they want them.

As children get older, parents can introduce concepts such as credit and loans. Suppose a young teenager wants to buy a new video game but does not have the cash for it. Her parents could use this opportunity to teach her about loans by lending her the money for the video game and requiring her to pay them back like she would have to at a bank or credit union.

Allowing children these learning opportunities can be very valuable teaching experiences. If they make a mistake with their money when they are still children, the cost of the mistake will probably be a lot less than if they made a similar mistake as an adult. Mistakes are actually good learning tools for adults and children alike, but to prevent the mistake from being potentially catastrophic (for example, bankruptcy or foreclosure), children should learn about them when the price is not so high.

For more information on this topic, contact Christina Rittenbach, Stutsman County Extension Agent-in-Training, at 252-9030 or Christina.Masich@ndsu.edu. Information on this and many other topics can also be found on the Stutsman County Extension website: www.ag.ndsu.edu/stutsmancountyextension

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