UNITED STATES—How do you teach children the value of money? It seems simple, but to me it always seems like a never-ending battle where I feel like I always come out on the losing end. I’ve been told that if you give a child money and force them to spend it to get the things they want, it will help them understand how the finance world works. I wish I believed that, but I don’t. You run into that situation, where the child wants more and more and more; it never ends.

We all know kids can be annoying at times. The more they whine the more we are likely to give in to prevent from hearing the endless crying. I will admit I am one of those individuals, and I should be considering I studied psychology as an undergraduate, with a specific emphasis in personality and child psychology. People play games and kids are much smarter than we’d like to give them credit for. They know how to behave and what to say to get the things they want.

I’m a firm believer that you cannot reward bad behavior. By doing so you only send a bad message to the kid, that is a never-ending cycle. I saw this transpire greatly with my little brother, where my parents just gave and gave and he now thinks money grows on trees. He has no responsibility whatsoever, and he believes its someone else’s job to ensure his bills are paid. Dude, you’re 25; when the hell are you going to grow up and take accountability for the actions and decisions you make?

This is where smart money management comes into play. You have to understand what a priority is, what a want is and what a need is. I’ve had countless conversations in the past about deciphering a need from a want. People confuse those two all the time, and they are NOT the same and you cannot justify a NEED over a WANT. People doing it all the time, but when they seriously think about it they realize the mistake they’ve made. As a result, they are now clamoring to earn extra money or work to bring in extra income to cover an expense that should have been taken care before spending funds on nonsense.

When it comes to kids I believe the new approach I’m going to take is to give an allowance. You work for that allowance and you receive payment for it. What you choose to do with that money is up to you, but the rule of thumb now implemented is once it’s gone it’s gone. Don’t come to me asking for a loan, don’t come to me asking for extra money. You’ve earned what you’ve earned and you’ve chosen to spend it the way that you chose.

I want to force kids to think about what they are spending, where they are spending their money and how much of it they are spending. Americans are not saving enough money in present day society; we spend more than we save and we find ourselves asking stupid questions like, “Where did all my money go?” Kids are a reflection of the adults in their lives. They mimic what they see others do, this is not just behavior wise, but how they process and think. You can teach smart methods of how to handle money and finances to kids at an early age, which places them in a situation to utilize those same tactics when they become adults. Start now, because if you wait till the kid is a teen or young adult it might already be too late to reverse the damage.

Written By Kelsey Thomas