September 2, 2010

Teaching Children About Money

People have strong feelings and opinions about money. Children think parents have an unlimited supply of money. Ever heard these from your child? "Just go to the money machine." or "Use your credit card." It's vital that parents take the time to teach their children about money and good money habits.

An allowance is a good first step in teaching children how to manage money. Don't tie the allowance into any specific chores. Some chores are required to make the household run smoothly and everyone in the family must help with no pay. Chores for pay are chores that go beyond normal day to day running of the household.

For a young child you might consider giving them $1.00 a week. Break the allowance into coins such as dimes or quarters. This allows them to easily count their money and place it in containers labeled, "SPENDING," "SAVING" and "SHARING." 

You might request that they put a dime into sharing, two dimes into savings and the rest into spending. For quarters it might be one to share, one to save and two to spend.

Consider a charitable cause to teach your child the importance of giving.

Tie saving money to a goal. Find a picture of the item your child wants to buy. Hang the picture where it can be seen so they keep the goal in mind.

Side Notes:

Older kids and teens can benefit from having a savings account at the bank.

Kids spend less impulsively when it's their own money.

The best way to teach your children about money is to be a good role model.


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