There are several aspects of effective parenting, and one of the most important is teaching children how to save and spend money. Wise financial habits can make or break your child’s formative years, since learning how to manage funds could save your son or daughter considerable stress and money-related mistakes in the future.
It’s especially important for Black parents to teach their children about the value of money, since the Council for Economic Education states that less than 20 percent of teachers feel qualified to teach personal finance in school. The Council also reveals that only 17 states require high school students to take a personal finance class. Black and Hispanic students are also more likely to make a lower score on personal finance tests than white students, which is an indication that families should focus more on money management and view it as a moral value, just like other principles that have long been instilled in the Black community, such as family loyalty, politeness and respect for elders.
The Huffington Post reports that debt collectors are much more likely to go after African-Americans. Even though whites and Blacks have similar credit card debt amounts and repayment practices, a recent survey reveals that 71 percent of blacks were called by debt collectors, while only 50 percent of whites were contacted by phone. Catherine Reutschlin, a Demos report author, shared with the Huffington Post that Blacks are more likely to have bill collectors call their homes because they have additional credit report blemishes that would send their bills to collection agencies.
Because African-Americans are more frequently targeted when it comes to debt repayment, it’s vital that Black parents teach the value of money and long-term financial management. Here are a few practical tips for helping your kids to be prudent with their money.
According to Black Enterprise, Black parents are more comfortable talking about bullying and the dangers of drugs than money. Finances have long been a taboo subject in the Black community, since parents have often viewed finances as “grown folks’ business.” However, in order for children to be secure with their financial choices, they need to learn the value and power of money early in life. This is only fully possible when parents are at ease talking about money in a way that is appropriate for the child’s age.
Share the Cost
Letting children know how much toys, clothing and shoes cost gives them an accurate idea of how much work it takes to get the things they need and want. This also enforces the notion that money is valuable. Black Enterprise suggests that children should start learning this lesson around the age nine.
Provide a Monthly or Weekly Allowance
Giving your children an allowance can also teach them to save and spend with care, especially if you have them purchase some of their own clothing for school or meals for the week. Along with an allowance, you can also help your kids keep a money journal to track their spending, so they’ll still have money before the next “payday.”
These helpful tips can get your children started on the road to financial freedom. As your children grow, it’s best to introduce them to new monetary principles based on these basic suggestions that will lead to healthy spending and saving in adulthood.