A recent article in the Wall Street Journal had some good ideas for helping kids cultivate wise money management habits. Whenever your son or daughter tells you about something they desperately want, add it to a written wish list. A few days or weeks later go over the list to see what they’d still like to buy or receive as a gift. You’ll be surprised at how many items they can’t remember ever wanting. That teaches the value of a cooling off period–walking away from a potential purchase long enough to think about whether it would be wise. Next, as the article’s author discovered, kids spend more freely when using their parents’ money rather their own. He once gave his daughter $5 for a school field trip and asked her to give him back the change. She came back with a few pennies. Next time he said she could keep whatever change she had leftover. She came back with the full $5. The lesson? Give them an allowance, but require that they use a portion for some of the discretionary items you used to buy for them.
Of course, the cooling off period idea is a good one for us big kids as well.