Teaching Your Kids About Money : Part 1

Having money is crucial to obtaining the things we need in life, and of course, having extra for the wants is nice too. However, money problems can occur when parents don’t teach money management skills at a young age, usually when the child starts getting an allowance or has a job, such as babysitting or mowing lawns. When credit card offers start arriving in the mail, they are an easy fix when there’s no more money left. Teaching your children about money, as well as credit cards, can be easy, and even a fun experience, but most importantly, a very valuable lesson. Here are a number of ways to teach children about money, so they don’t end up having problems in the future.

• Introduce them to money—when they are young enough to count, take an active role in teaching them about currency, such as pennies, nickels, dime and quarters, as well as dollar bills. Have them do simple math including adding and subtracting. When they get older, you can introduce new concepts and issues.
• Teach by example—teaching your children about money becomes a much easier task when you have learned the lessons you are teaching. Children are smart and they know when a parent is a good example. Your kids won’t listen to a word you say if your money management skills aren’t up to par, so learn all you can about budgeting, saving, investing, reducing expenses and cutting out debt. When you’re armed with knowledge, you’re better able to teach your children.
• Give them an allowance—yes, that means give them some money. Even if it’s a few dollars a week, let them take control of their own money and make their own decisions about what they want to do with it. A good example of how much to give them would be a dollar for their age. So, if you have a ten-year-old, give them ten dollars, for either a week or a month, depending on your own budget. If they’re never given any money, they will never learn how to manage it. This way, they can then see first-hand what it’s like to have money. Hopefully, if you have taught them, first by example, and then with the knowledge you have gained, they will think twice on how to spend it, or even if they want to. They may decide to put some away for a rainy day or they may blow it the first chance they get. Whatever choice they make in managing it, will help them be good money managers in adulthood.

Stay tuned for Part 2 on Teaching Your Kids About Money

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