All this great stuff is just too tempting. Every kid thinks he needs an iPhone. He must wear Supras, and the only way he’ll have any real friends is to wear Hollister. That’s fine if he has a job and can pay for some of this stuff himself, but in this economy, it makes more sense to teach kids about saving money. Somewhere along the way, we decided that the only valuable life was a life full of stuff. Even our government is constantly telling us that the only way to economic recovery is through spending. Maybe a corporation will recover that way, but a family will not.
It’s time to get old fashioned and save our extra money for the really important stuff. That stuff should be defined around good people and great memories. Teach your child to save his money for something spectacular. It could be his own car, or college money or even an amazing trip to a foreign country. Whatever you do, just make sure that his first finance lesson is to save some of his earnings. By setting this standard early in life, you’ll help your child establish a reasonable spending pattern that will last a lifetime.
There are some economists who believe that today’s youth will be better at saving than their parents because the recent economic crisis will have made such a big impact on them. That’s highly unlikely to happen if the parents haven’t learned to save and change their spending patterns. Kids need to know that nothing comes easy. It takes hard work, good personal finances, a solid savings account and the right investments in life. They may also need to be reminded that the best and richest investments in life don’t cost a dime. Those are the healthy relationships they will form throughout their lives. Real friends are free, but they are also priceless.