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Parent’s Guide To Teaching Your Kids About Money

February 6, 2011 | Education | Guest Post | 1 Comment

There is one really good reason to teach your kids about money; so that you do not have to support them. You have probably heard loads of stories or maybe even know someone who is still financially supporting their adult children. I have heard these same stories. I even know a couple who overextended themselves in order to bail out their child to such an extent that they wound up losing their house. While we all want to be able to help our children out in an emergency situation none of us want to have to support them after they leave the nest. That is why it is important to teach them good money management skills at home. You can start when they are very young and continue the lesson on into their years at college.

Tips For Teaching Kids About Money

Check Yourself First – Before you can start teaching your children about the importance of saving money and spending wisely you have to make sure you are doing it yourself. Kids are smart, they will pick up on the fact that you are not following your own advice. Once they know that your finances are a mess they will simply shut down and ignore all of your advice. Lead by example and have your finances in order at all times.

Share Money Decisions – Once you know that your finances are in order you can help your kids learn about the value of money by sharing financial decisions with them. Do this at an age appropriate level. For small children you can explain how much things cost and have them help you count out the money to the cashier when you make purchases. As they get older you can talk to them about how many hours you have to work to earn the money for the things you want and need.

Have Them Earn An Allowance – Allowances are not just rewards for existing. Kids should be given an allowance that is actually earned by doing household tasks. This teaches them about earning money and about the value of working. Even very small children can do things like clear their own dinner dishes and pick up their toys. The tasks and the money should be proportional to their age. It should also reflect the quality of the work, so if a teen does a shoddy job mowing the grass they should get a pay cut too.

Teach Them About Saving And Spending – Sometimes parents only focus on one of these things, but really they go hand in hand. Your child is going to want to spend their money, and they should be able to do so. Help them understand that they do not need every new gadget and how to make smart and responsible choices about spending. They should also be encouraged to save some money. You might add some incentive by matching a portion of their savings or allowing them extra privileges for leaving money in an account. After a while they will take pride in how much money they have set aside and can even imagine saving for something really valuable.
Teaching your children about money is something you can do every day in all kinds of different situations. It does not have to just be about setting up a budget and sticking to it or boring lessons on economics. Once your child understands that everything costs money and that it does not simply come from a tree in the backyard they will be more responsible with every dollar that they earn.

This article was written by Timothy Ng. You can read more of his work at Credit Card Finder, where he has a number of comprehensive guides to all types of credit cards.

 

 

 

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One Comment to “Parent’s Guide To Teaching Your Kids About Money”

  1. EdH
    11:40 am on September 3rd, 2011

    Your first bit of advice is spot on – even if your kids don’t know the state of finances, they can see how you spend money, make decisions about money, consider purchses, etc. I find it tempting to just say yes to my kids at times, but I can also be too pedantic – it works best when I am not heavy-handed and it just fits in the moment.
    EdH recently posted..Free Money for College?!?My Profile

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