Parental Tips on How to Teach Your Kids about Money
In these difficult economic times, now is a good time to begin teaching small children about money in a manner they can appreciate and absorb.
Here are some tips:
* Sit down with your children and talk about money and its value. Use coins to show examples of how money is earned and spent.
* Talk to your children about the importance of saving. Use tools such as a piggy bank or the family jug to illustrate the point.
* Explain to your children the difference between the items you need and the items you want.
* As they grow, show them how to use a checkbook. Explain what the checking account is for and then take them to the bank and explain its function. Let them see how you deposit money into a savings account.
* When they are old enough, take them to the bank to open a savings account of their own.
* When you take them grocery shopping with you, explain why you choose one item over another.
* Have weekly discussions about the family budget.
* Explain why it is important to save money, especially now. Give them a clear picture about the current crisis so they can understand why family spending has to be cut down.
* Take out the Monopoly money and use it to illustrate how the family budget works.
Experts from Family Education advise that it is never too early to teach children about money. From ages six through ten is a good time to begin discussing what money is, how it is used, and the importance of being responsible as well as understanding that everything costs money.
From ages eleven through thirteen, you can begin the process of opening up a savings account, how to shop in an appropriate manner, and the importance of giving to those less fortunate.
Teenagers from fourteen through eighteen will be learning about getting a job, saving for college, budgeting, the pitfalls of credit cards, and the meaning of taxes.
Allow young children to ask questions and answer them honestly. Utilize repetitive learning and give them small tasks they can perform to ascertain if they fully understand its meaning.
Finally, lead by example. Children learn from their parents and if they notice that the family is utilizing money in a responsible manner, they will begin to make the connection and become financially responsible as adults.