Money management is not a natural skill for most people and must usually be learned through experience or education. When teaching money management, it is important to keep in mind that a teacher is usually changing a student's ideas about a material with which he or she is already familiar. This can, in some ways, be more difficult than teaching all new material. Teaching money management also requires changing attitudes about spending, as comprehending delayed gratification is a major part of adult life and financial security.
Many schools believe that teaching money management is an important part of a life skills curriculum, but this is sometimes difficult because students do not often have money with which to experiment. Teaching spending skills in the abstract is usually ineffective, but creating an artificial environment in which fake money has meaning can be a useful exercise. Some schools choose to set up student markets, but others use video games and other simulations to keep children interested in the process. Virtual rewards are cheaper than real rewards, but mental investment in the program can help younger people learn complicated concepts like credit and investing.
For parents, teaching money management is sometimes more difficult, because children are often used to seeing parents as unconditional providers of material goods. Giving a child an allowance is one way to help him or her learn about financial responsibility, but providing too much of an allowance can be a bad idea. Teaching an older child about his or her own financial future might include information about taxes, how loans work, or even basic investment strategies.
Teaching money management to adults is often more complicated and must involve more than the mere basics of budgeting. Adults need to know about long-term financial planning, retirement, and responsible management of family resources. In some cases, this may involve undoing many years of bad habits involving money. When working with adults, it is important to keep in mind that no amount of information can overcome a lack of self-control.
One important tip for teaching money management is to make the lessons important to the students. Money is not naturally interesting to many people, but the things a person can do with money are applicable to all people. As such, the abstract concepts must often be de-emphasized in favor of the practicalities of responsible financial activity. This is not true in circumstances where people come to learn about specific financial strategies, but is typically the case when the financial course is not voluntary or is designed for beginners.