Photo by Ian Koh licensed under Creative Commons

Young recently posted an entry asking those who have children (or plan to have them), how they intend to help their children learn about finances. Early Retirement Extreme gave some good common sense advice in the comments.

Very easy. Set a good example. Children will mostly imitate their parents unless the parents are completely unreasonable in which case the kids will eventually do the opposite of their parents. If nothing else, I think keeping financial matters hidden from children is a bad idea.

While this is excellent advice, I think there’s an aspect of being a good example that’s often overlooked. Even if you’re “being a good example” in the sense of doing sensible things with money, unless you make a point of actively including your children, it’s often invisible to them.

For instance, even though my parents helped me figure out finances in some ways, in most they just left me to fend for myself, assuming that I had observed what they had been doing over the years. The problem was that since finances weren’t at all interesting to me as a child/teen, even if they’d been balancing the checkbook right in front of me, I would immediately tune it out.

It seems to me that being a good example is much more than just doing the right thing when the kids are around. It also means actively showing them what it is you’re doing. What do you think?

Photo by Joe and Sarah licensed under Creative Commons

TheHonestDollar has a post up about how personal finance is like riding a bike. It’s a great post, and the comments got me thinking about training wheels and the role of parents in how we learn to ride bikes and handle money.

I learned to ride a bike when I was around five. My parents gave me a helmet and insisted that I wear it all the time, but they did not give me training wheels. Somehow I just figured out how to ride with the help of my older siblings, and things went from there.

That is a little like the way my parents handled training their children about personal finance. They taught me to never borrow money (that’s a little bit like wearing a helmet) but they did not give me anything else in the way of suggestions about budgets or credit scores, never mind financial help once I was eighteen (so no training wheels).

Since I decided that a college degree was worth much more than being debt free in my early twenties, I guess I am rather like a five-year-old riding a bicycle without a helmet or training wheels. Falling over has not been fun, but I hope that In Debt and I will figure it out eventually!

I think that I will probably handle things differently with my children, but I am not sure whether there really is any one best way to train children about finances. For those of you with children (or plans for them in the future) how do you plan to help them learn to manage their finances?