Teaching Kids About Money
The kids are watching you spend, save, invest and earn money everyday. What kind of example are you setting? Your children's attitude toward money will be shaped by what they grow up watching you do. You know the apple doesn't fall far from the tree.
Today parents tend to expect less of their children than their parents did from them. Disciplining a child and teaching them to show respect is less important today than a generation ago. Teaching the value of money is no longer a top priority either.
Do your children and yourself a favor and teach them the value of money. Kids need to learn how much things cost, how to use money, earn it, save it and keep it in perspective. The fact is that an increasing number of young people are growing up today without a necessary understanding of money basics.
Need versus want is a hard concept for adults to grasp. The earlier children are taught this the better off financially they will be as they grow older. Spending money is always a choice, teaching kids how to spend it helps them develop good money management habits for a lifetime.
The goal is to raise independent adults who know how to manage money and have a healthy regard for what it can and can't buy.
Money Smart Kids
Ages 2-5: This is the age children learn that money can be exchanged for things. Practice identifying different coins to teach them their value. Even a two-year old can be taught to put coins into a piggy bank. You'll be surprised how fast they catch on.
Ages 6-11: By age six, kids begin to realize how money is earned, saved, and spent. Kids in this age group will start being influenced by their peers. They become aware of name brand high-priced sneakers or jeans, and be more vocal in wanting these items.
Ages 12-16: Make sure your child understands the concepts of comparison shopping. Teach them how to use a savings account; how to fill out a checkbook; how to responsibly use a debit card and credit card.
Teaching children how to set goals, earn, save, take responsibility for their own actions, to participate in the housework, budget their money & balance a checkbook are important and often overlooked aspects of parenting.
Kids Allowance Tips
- Give age-appropriate allowances. The suggestion is between 50 cents and a dollar for each year of age.
- Give them an allowance in bills that encourage savings -- for example, use five one-dollar bills instead of a five-dollar bill.
- Establish a base allowance and if kids want more money, let them negotiate for other chores at established rates that you discuss before hand.
- Take the kids to a credit union or bank to open their own savings accounts.
Helpful Websites and Tools for Kids & Money
www.moonjar.com - Designed to help families save, spend and share.
www.kidsbank.com - A fun place for kids to learn about money and banking.
www.moneyfactory.com - The U.S. Department of the Treasury - Bureau of Engraving and Printing
www.funbrain.com/cashreg - Part of Family Education Network.
www.kids.gov/k_money.htm - The official kids portal for the U.S. Government.
