Teach Your Children About Money

However, money problems can occur when parents don't teach money management skills at a young age, usually when the child starts getting an allowance or has a job, such as babysitting or mowing lawns.
Teaching your children about money, as well as credit cards, can be easy, and even a fun experience, but most importantly, a very valuable lesson.


Introduce them to money.

When they are young enough to count, take an active role in teaching them about currency, such as pennies, nickels, dime and quarters, as well as dollar bills.
When they get older, you can introduce new concepts and issues.
Children are smart and they know when a parent is a good example.
When you're armed with knowledge, you're better able to teach your children.
Even if it's a few dollars a week, let them take control of their own money and make their own decisions about what they want to do with it.
So, if you have a ten-year-old, give them ten dollars, for either a week or a month, depending on your own budget.
This way, they can then see first-hand what it's like to have money.
They may decide to put some away for a rainy day or they may blow it the first chance they get.


Teach them one principal at a time.

If you bombard them with everything all at once, they will only be confused.
It takes time.
For example, this month, you can teach them about budgeting their money.
If you teach line-by-line, precept-by precept, they will absorb more of the lesson.


Give them opportunities to earn money.

Whether they go beyond completing their chores or do a specific job you need help with, give them extra opportunities to earn money.
If they choose to blow it all up front, it will teach them about patience and saving for what they really want.


Teach them about credit.

Humans are impatient creatures.
Credit cards have become the staple for many families, often leading to out-of-control debt, but when credit is used wisely, it can be very valuable, such as for credit ratings.
Having a good credit score rating can open doors for small business or college loans.
Tell them that credit has to be paid back, often with high interest rates, and that only when they have a plan to pay it back should they get a credit card.
That would be hard for any adult to achieve, let alone a child, but it can be done.
When you give allowances, give it to them in denominations that encourage savings.
When they have saved the money, pat them on the back for a job well done.


Teach them about budgeting their money.

Even if they only get a few dollars a week, children can list things they want to do with their money and whether they have the money to get those things.
Sit down with them and help them a few times to budget, or project how much that particular item will be, and then determine if they have the money, or how much money they need to save in order to get it.


Have family discussions about money?

Check with them about their money management.
Having a set time to talk about money issues will also help keep everyone on task.
For younger children, you could talk about the difference between cash, checks and credit cards.
Sometimes just opening the door for communication will help with any potential problems or issues that may come up, especially if the child begins a new job or looses one.
Tell them your plan for saving the money and chances are they will want to save their own money as well.
Debt is a four-letter word for many families and can cause un-needed stress, but if we have our own savings account, occasional spending fund and emergency fund, we are more able to be financially secure, so that when the dishwasher goes out, we have the money to replace it.
Remember, children learn from example and we, as parents, need to try to be good examples of money management.
If they were saving their money for something they needed and they ended up spending it on something different, don't get it for them.
When they are older, teenagers usually need money for car payments, fuel and maintenance.
If they run out before they are paid again, they may have to walk or ride their bike, or a bus to work.


Money is a fun thing to have, as we are all aware, and teaching children at a young age about money will go a long ways to ensuring that their financial future is the best it can be.
They will have account options that will fit best with their age and other tips in spending and saving wisely.