Family Money Management

Family money management is great! I was not taught this skill growing up but I have learned the value, and ease of teaching your kids about money.

The first step is to handle money properly yourself. If your children see you and your spouse forgoing wants in order to build savings they will learn a valuable lesson.

When my husband and I discuss finances we focus on goals stay away from momentary wants. If one of us wants something that is not in the budget and is not needed or practical the other one is able to be a voice of wisdom without offense.

For example I really want a new couch set. But the one we have works. And soon (within a year) we will be moving into an area with a depressed housing market. Meaning we will get a larger house, for a smaller price. We will want to pick a couch set that matches what we buy plus keep the old ones for a family room, which we currently don’t have.

Consequently when I share this want my husband is a voice of wisdom, which for that purchase I need.

However when my husband wants a restored 67 Ford Mustang convertible with luggage rack, I can be the voice of wisdom since the vehicles we have work. And the additional car is not needed.

This is not to say that you should never have extravagances, just plan for them. My couch set is planned for and we will probably buy a gently used set. Or find a great sale and buy it without credit.

Also I would like my husband to have the car he wants, it brings back memories and will be fun. But if he can make the car he has now last as long as possible we get the most use out if it for out money. Also we have no place to store a nice car to keep it maintained. So we are planning when that will happen.

The point I am trying to make about family money management is to set your priorities and stick to them. Maybe your priorities include travel, entertainment, family time, education, etc. All these can be a planned part of family money.

Once you lead by example the next step is to grab the teaching moments with your kids.

Your kids overhear more than you think. They are interested in the adult world and want to understand it. So they look to you. My oldest daughter (age 7) often asks questions about money and it easily flows into interest. Both earning and spending it. She now understands that money can make money, and the cost of a purchase can be much higher if you are paying interest.

Family money management can be used to get you out of debt. Involve your kids in the process. Instead of hiding your mistakes be open. If you begin to change your spending habits your children will notice. Use this as a teaching moment. Does both parents working help you get out of debt? How chores help teach money management Involve kids in house work and teach them money skills

"A man in debt is so far a slave,"
Ralph Waldo Emerson.

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