Teaching Kids Money Obligations
For kids to really understand money, they need to understand it comes with obligations and commitments. Learning how to spend and save is important but so is learning that there are things in life that MUST be paid.
Kids understand that parents pay rent or mortgages. They have probably heard the term property tax and/or loan. But do they really know what that means? And do they know that not paying those has consequences?
We should be teaching kids about the “must pays” in life and the liabilities that can be associated with money.
Our first thought when it comes to financial literacy as parents is to teach our kids how to save. That’s great! But to give our kids a full understanding of how money works, let’s teach them about credit cards, fixed payments and non-negotiable debts. These will be a part of their lives too.
Here’s a way to start the conversation…
You gave a friend $100 for a video game and they told you they would pay you back, but they didn’t.
How would you feel if they said “No, I’m not paying you back now.”?
Would you want the video game back?
Would you be angry?
It’s the same with anyone when you commit to paying bills, even as adults.
There are consequences if you don’t pay back what you promised. Maybe you get services taken away. Maybe they will never give you services in the future.
Money obligations are a lesson that is just as important as saving and decision making!