How to Position Your Children for Future Financial Success

Millions of parents around the country are helplessly watching their personal finances dwindle and their bills mount. Many people just don't have enough money to maintain even a modest lifestyle so they are maxing out their credit cards and their children are beginning to notice.

Lisa Charles, a teacher in New Jersey, was going over her credit card bills when she noticed her son staring at her. "He recognized the painful expression on my face and he asked me if I was alright. That's when I decided to talk with him about our money situation," she says.

Kids are smart; they can perceive even subtle changes in the household. So when parents start to alter their spending habits - no more Friday pizza or renting movies - it sends a message to them that something could be wrong. Don't hide it from them or ignore their questions when they want to talk about why, for example, you stopped ordering pizza on Fridays.

By choosing to ignore your children, you leave them with no other option than to create their own reasons why you are cutting back on spending - maybe Mom or Dad lost their job, maybe the family is going to be kicked out of the house, and the list goes on and the anxiety grows. Kids are not prepared to cope with this burden and it can have a negative impact on their behavior; school work may suffer and they may become overly worried.

Instead, sit down and talk with your kids about money. Be honest but don't be all doom and gloom. Create a plan to get out of debt. Relate to them how you are dealing with these financial issues and the strategies you have in place to survive this turbulent time. Ask your children for their input -- it makes them feel like they are helping, thus giving them a good feeling about your present circumstances.

By speaking with your children, you are also giving them an education on the financial aspect of life. Teach them about the importance of saving and what can happen if they spend recklessly. If your children get an allowance, use that as an example. If they spend their allowance in 1 day then they are out of money until they earn their allowance again. Teach them to be thrifty and smart with their money.

It's also a good time to talk about the importance of school and getting good grades, which can lead to a career that affords them financial stability. It's also appropriate to let them know that hardships happen, even if you have a good career and that preparing for financial hardships is smart. They have to understand that old cliche "money does not grow on trees" and that you have to earn it and save it.


Visit Consolidated Credit Counseling Servicesto get help during tough economic times and set a good example for your children so their financial future is bright. Copyright © 2008, ARAnet, Inc.