Saturday, March 03, 2012

Teaching kids about money

I feel one of my jobs as a mom to help my  boys to succeed in life is to teach them about money. and how to manage it properly.   Parents who know that their kids understand how money and debt work can rest assured that they will be able to take care of themselves even when they are not around. If you need some tips for teaching your kids money lessons, this article might be able to help.
24 - kids walking
If you give your kids what they want when they ask for it or if you regularly give them money just because they want it, you need to stop doing that. If you really want your children to learn about money and its value, you should make them work for what they want.
Making your children work or do chores in order to earn money provides them with some very valuable lessons. For instance, they may learn the self-discipline that is required in order to successfully complete a job on time. They will also learn to associate money with work and the next time they go shopping, they might think twice about purchasing something they do not need, since they will be thinking about how many work hours go into paying for it.  This has been very helpful for my 10 year old and he has become much more frugal with his hard earned cashed.  However when Nana simply handed him some cash for a gift or just being a great grandson, the money would burn a hole in their pocket.   
As soon as my kids knew  how to do basic math, I  started  teaching them about savings accounts and how they work. It may be useful to make a chart that demonstrates how money grows as it is being saved.  My younger son wanted to get a new Nintendo DS  game and we made a nice chart on how much he would need to save or earn  each week to  get it.

Teaching kids money lessons is possible to kids as soon as they hit school   They need to realize "money doesn't grow on trees" . All you need to do is regularly discuss how money is saved and how debt works.    If possible, give them some real experience with money by letting them earn, spend, and save it for themselves.

How do you teach your kids about money 


Kathryn said...

My son is now 18, but I have always had my son do chores and to earn money and not only does it build a work ethic, it can teach math, saving and budgeting.

An unexpected by-product of this is he has learned to become a skilled negotiator/barterer. We were at a garage sale when he was 5 and he wanted 3 toys that were 50 cents each and he only had $1. He asked me for 50 cents and I told him no. He went to the lady running the garage sale and said "These are 50 cents each and I only have a $1; thats a problem. She laughed and asked why he thought he should get a discounted price. He went on to explain why Batman, Robin and one of the Power Rangers needed to stick together to overcome evil and gave examples. She sold him the 3 items for $1.

To this day he has worked out deals (with permission of all parents involved) to trade things with his friends that he wanted that they no longer did for something he had and no longer wanted. Additionally, as he has been in an automotive program through his high school for over a year, he trades doing certain tasks in exchange for items.

martianne said...

This is a timely post for me as my children and I just finished a local piggy bankers course and my husband and I want to start getting more serious about teaching them good stewardship. Neither of us grew up with allowances, but we are considering them as a way to help teach the kids about earning, management, etc.