The First Four Things to Teach Kids About Money
Initial Lessons in the Teaching Children Finances
Oct 6, 2009
By starting out early and helping kids with money you can educate them in four logical steps. Think of this as a process that will take place over time, with the end result being a child who has mastered money management.
Teaching the Basics of Money
At the beginning, it is important to keep things very basic. This is precisely why a piggy bank can be very effective for younger children. Kids tend to relate to things like this when they are young, and it offers a chance to let them know that they can save up their money and make it count for something. As a parent, always try to make sure the child is excited about putting money into the piggy bank.
Another basic lesson is showing them that you are indeed paying for the things you buy for them. Most children respond to seeing that money is needed and the toys or gifts they have received don't just magically show up.
Allowances and Educational Learning
Using allowances for children is a good strategy that many parents use. This allows a parent to reward children for work they do around the house, while also motivating them to save up their money and start spending things on their own. When they start earning an allowance tell them that they need to use that allowance on the things that they want the most, which will also help them prioritize.
Additionally, using educational learning games that incorporate money in any way are very helpful at this stage. Simple board games such as Monopoly and Life can be used for these kinds of learning experiences, or money software games for children can also be ordered.
Make Sure They Understand "No"
In parenting, teaching children the understanding of the word no is important for many different reasons, but money is one of the most important places to put this into practice. Children who know little about money management will always be asking for something else to be bought for them, and this gives the parents a chance to step up and say no. If children learn that no means no when it comes to money, they are learning a valuable lesson for childhood and the rest of their life.
Kids and Bank Accounts
The fourth step is opening up a bank account for the child and investing some money into a deposit account such as a certificate of deposit or a money market. In this step it is important to interact with the child and let him know what is going on. Banks will give customers a book that keeps track of the amount of money in each account and the amount of interest earned over time. As a parent, this provides a perfect opportunity to show children that investing their money that has been saved up can make them even more money.
Children and Money Management
These four steps are very useful in helping teaching children money management. Children should start learning about money at an early age and continue to learn as they grow up. As a parent, one of the most important things that must be done is to practice what is taught. If parents are not following their own instructions, why would the child? Make it a point to be frugal and manage money efficiently. Teaching kids money is something that can be done, but it must be a process that is thorough and well planned.
 |
