Teaching our children fiscal responsibility

In our economy today, everything seems unstable. Between business outsourcing, business closing, foreclosures on the rise, and over 20 % of African Americans are unemployed, it seems like a never-ending spiral downward. A lot of our children today have feelings of despair when contemplating joining the work force and becoming financially responsible for themselves.

Financial responsibility has not always been greatly emphasised in the the African American community. Most of us were not taught the meaning of credit or how to manage it. We were not taught at an early age the importance of home ownership and equity. The vast majority of us have not been introduced to the ideal of “Guns vs. Butter”. “Guns” refer to things that provide true wealth and power, such as land. “Butter” refers to the luxuries that we allow ourselves, such as cars or jewelry. We were not taught that we must have “guns” to live and thrive. “Butter” only makes us grow lazy with comfort.

However, we as a community can do things to teach our children to become fiscally responsible and financially savvy. The younger we start, the better.

The first step is providing our children with an allowance. We can explain to them that their allowance is like a salary. It is to be wisely used, not only for their pleasure, but also to save. We can teach them about storing away 10 percent of their “salary” every time they receive it, so they can start learning the ideal of saving. That way they learn that you don’t have to spend every penny you get every time you get it. We also need to introduce the ideal of tithing from their money so that they are comfortable with it by the time they become adults.

Hopefully, that starts a dialog about spending. How to spend, when to spend and where, for what purpose are all questions that need to be addressed. We need to be sitting down with our children and not only talking about their money but letting them see us pay our bills and how we manage the household accounts so they know what is expected once they become adults. It is also a good idea to sit down with the finance pages of a paper, or check out the Dow Jones online. We need to be introducing them to the idea of investing their savings so that they will grow and thrive.

And by the time they are in high school, they should be ready to make investments of their own. They will enjoy watching their money grow. They will feel pride of ownership and belonging when they utilize things provided by companies that they have invested in. And they will not feel it is a foreign concept to save and invest, while still having money to enjoy their lives.

In this way, we can start to reverse some of the irrational spending and credit habits that our generation and those before us have perpetuated for so long. Our children will be much better equipped to face the financial and credit challenges set before them than we were.

–Jaquita Jackson