What You Need To Know When Teaching Kids About Money
What You Need To Know When Teaching Kids About Money
Teaching kids about money is an important responsibility, and one that can affect your children for the rest of their lives. How we work with our money, balance our budget and save for rainy days is learnt from a very young age. The best way to teach your kids is by example. If you want them to appreciate the value of money and the hard work that went into earning it, you need to do the same.
One of the easiest ways to teach children about money is to get him or her to earn it. A three year old can take serviettes to the table, bring potatoes out of the refrigerator and help to wash the car. Those chores can be rewarded with a token payment that gives your kids the opportunity to start working with money. Older children have more options and opportunities to earn extra cash.
A bank account will help your child handle their money while providing a good way to save. Explain to them that saving some money each month allows them to build up a reserve that they can then use for an 'emergency' - in their case the latest gadget or outfit that everyone else supposedly has! A bank account will also teach them about bank charges and interest.
Teach kids about money through budgeting with their money. Show them how to add up their income (allowance and additional earnings), take off their expenses like toiletries and music, and then allocate the remaining money to savings or investments. Encourage them to write down their budget each month - and stick to it.
Another great lesson your children can learn is the value of helping others. Get them to donate some of their cash to a deserving cause - one they are interested in supporting.