10 Things I Can't Teach My Children About Money Management.

Money is something we all need to manage. Whether it's for savings or a credit card, managing money can seem like a daunting task. Parents often want to teach their children about financial stability, but often times there are boundaries that should not be crossed. This article discusses the ten areas that many parents should not discuss with their children and what they can do instead so they are prepared for when these conversations might come up.

1. Income.

The first thing to discuss when teaching your children about money is their income. That's right, children should not be provided an exact income figure, even if only for a certain period of time. Often times, this number might be misleading if it does not also include the other responsibilities that come with the job such as taxes and health insurance premiums. Parents should instead focus on teaching budgeting skills and how to choose practical expenditures over expensive ones that won't bring the same value.

2. Credit Cards.

Credit cards can be useful tools in the right hands, but they are very easy to misuse and can lead to devastating consequences if these young people are not taught how to use them correctly and responsibly. Parents should refrain from providing credit cards to their children until they are old enough to understand how they work and the consequences of using them improperly. Unsecured credit cards are often not the best tools for young people to use, but secured credit cards can be a viable alternative. When using this option, parents should place a limit on what their child can charge and make sure that they only charge what they can pay back in full each month.

3. Saving.

Saving is extremely important for young adults, but many of them never learn how to do it. Parents should ensure that their children have seen them save and make sure they have a proper account rather than keeping all their money in one place. This will help reinforce the concept of saving by having them watch the money grow and feel more empowered to save more often.

4. Credit Reports.

Credit reports can be very confusing even for adults, but they are even harder to understand for young people. Parents should not give their children copies of their credit reports until they are old enough to understand the information on them. This is because the information included can be very frightening, which will only confuse and discourage a child from learning proper credit management.

5. Debt.

Debt is something that many young adults struggle with, but few can admit it to others, let alone learn how to manage it properly. Parents should never talk about debt, including their own, with their children until they are old enough to understand and deal with the consequences. This will help reinforce that debt is something that should be avoided and there are better ways to spend money, one being saving or earning more income.

6. Spender vs Savers.

Some people are savers and some are spenders, but parents should not confuse children by trying to change who they naturally are as these individuals might not become good at either. Instead, parents should encourage their children to learn how to save and learn from their mistakes by making sure they are teaching them about the correct ways to spend and how to increase income.

7. Earnings vs Draws.

Some people earn money and some make money through drawing it from an account. Children need to understand these concepts in order for them to properly manage their money, but this is a lesson that parents should do so in an age appropriate manner.

8. Taxes.

Taxes are often a confusing concept for children and parents, but at least for young people, getting used to the idea of paying taxes is important. Parents should discuss the importance of paying taxes with their children from a young age and show them how they can reduce their liabilities through wise saving and spending.

9. Health Insurance.

Health insurance can be complex for even adults, but it's even harder to understand for young children. Parents should not waste time attempting to explain health insurance to young children. Instead, they should focus on saving for medical bills and identifying other sources of income that could help pay for a hospital visit.

10. Investment.

Investments are complex, but necessary to manage a child's money properly. Parents should not attempt to confuse their children with this concept until they are older and want to learn more about financial markets and how they can protect their money in volatile times.

Money management is a topic that must be addressed by both parents and their children. The article sums up with reasons why many topics discussed above should be avoided until the child is old enough to understand them properly and make informed decisions.