Alert your kids early to the perils of contracts

Many adults sign contracts without fully understanding them or reading them thoroughly.

It’s important when you are asked to sign a contract that you take the time to read it and know exactly what you are signing. Many times people are told “just sign here” only to find out later that if they had read it and understood it fully they would not have signed it.

 

Children are sponges. If they are with you when you have signed a contract without reading it, think about what your child has just learnt by what you have done. They have just learned without you saying a word, to sign a contract without reading it.   When they grow up they will most times model what you did, sign a contract without reading it!

 

A good way to teach a child about contracts is to make a simple written agreement with your child and have them sign and date it if they agree to what is in it. You could have some fun and make up an agreement which includes a clause – I agree to wash and dry the dishes by myself for three weeks. Say “just sign here” trust me! I wouldn’t get you to sign your name to something that wasn’t ok. If your child didn’t read it first then the best Money Lesson for Life could be to enforce the contract that your child just signed and dated. If they read it properly they will probably object to the clause about the dishes. Talk about what might have happened if your child had signed this without reading it properly.  

 

Explain to them that when you ask for your power to be connected with a particular company then you are entering into a contract with the power company to supply you power in return for you paying the bill. The penalties for not keeping to the contract could be that your power is cut off or you incur a fee for not paying your bill on time.

 

I was very fortunate when I was growing up that my Dad told me “never sign an agreement without reading it fully and always get a copy of what you have signed”. This simple piece of advice has stuck in my head and has prevented me from making bad financial decisions from lack of knowledge of what I was signing.   So to help your kids from making poor financial decisions pass on this simple bit of advice. Read any document fully before you sign it and if you don’t understand it – don’t sign it.

   

Silbo Systems, conduct money lessons for parents together with their children in small groups. For more information contact us