Money Management for Kids!
If money management is taught to your children they are more likely to become financially responsible adults. They will learn how to budget their money, live within their means, and avoid debt.
Your kids learn their spending habits and practices from you. Are you financially responsible? You must first examine your financial practices and make the necessary adjustments so you can pass on smart, financial habits to your children.
You can begin to teach money management to your kids as early as two years old. Start with a piggy bank concept. Place money in their piggy bank when they clean up their play area. Use a system and decide on tasks that are age appropriate. By using these concepts you are also teaching your children about the idea of work to earn money. We all know money doesn't come for free. So begin at an early age to explain to your children that by saving money in a piggy bank, there is money available to buy something they need in the future.
Part of teaching money management, is teaching accountability. I do not believe in handing over an allowance to a child. I believe the child should earn it. At each age, find things you child can do and hold your child accountable and responsible for it. At six years old, your children can tidy up their room. It may not be perfect or the way you would do it, but it's the effort and responsibility that must be rewarded.
|When the children begin school, find tasks they can do to earn an allowance. There are many chores and responsibilities you can find for your child such as. Limit television time to 30 minutes during school days. Take out the trash. Clean their bedroom. You can be specific here. for example, place dirty clothes in the hamper, hang clean clothing on hangers or folded in drawers or place books on the bookshelf. Complete homework assignments before dinner time. Clean the dishes after dinner. Bathe the dog.|
This style of teaching money management is also teaching good habits, responsibility, and getting your children involved in the running of the home. It teaches them to be tidy and to stay organized. At the same time, they are assisting you. They soon learn that they have to do something to earn money.
As your child grows older and enters the teenage years, add more items to the list of responsibilities that will be included as part of their financial compensation. There are many benefits to doing this. You children will learn money management, responsibility, and the infrastructure you create for them will be one that will carry over into their adult and professional life. Here are some rewards you can consider: Maintain a daily school agenda. Reward keeping it up to date. An organized study area to maintain a clean working environment free of clutter. Completing school projects on time, not staying up till midnight the night before it's due. This rewards your child for not procrastinating. Keeping the bedroom room, bathroom, clean and organized. You can offer additional bonus for making the honor roll or the principal's honor roll. For being obedient and not having to give any disciplinary action for 1 week. For attending all after school activities. Older teens can begin to work, baby-sitting, cutting the lawn, shoveling the snow.
An allowance should be given weekly. You the parent are responsible for food, clothing, shelter, or school supplies. Decide what expenses your child is responsible for. If you want you child to be more financially responsible then give more allowance money and increase their expenses. Maybe they can start paying for lunches at school or birthday presents for their friends. Make them responsible for their entertainment, going to the movies, or eating out. This helps them to budget their money. They have to know the price of their purchase and live within their budget.
A Savings Account.
Part of teaching money management to kids is to open a savings account when you child begins to earn money. Explain that a portion of one’s earnings must be put in a savings account. The money that is not put in savings must be budgeted. So if you children have $10 after making the savings deposit, they must learn to live within their means. If they want to buy a CD for $17, they must wait until they have enough saved up for that purchase. These valuable lessons that are taught at an early age can relieve your child of a lot of financial stress in the future.
A big lesson in money management is teaching your children how to bargain shop. Teach them how to utilize the sales racks and discounted items. Have you ever bought an item and two days later you return to the same store to find it on sale? Most stores will offer you the discount if you bring the sales receipt within a certain time of the purchase. Check with the store. Sometimes shopping at outlet stores can find greater discounts on the same brand items.
And who said that you have to sport an item with some famous designer name to be cool? Teach your children not to buy into that hype. It's a big marketing ploy to make wealthy designers even wealthier. If you can find the same items at a discounted price then that's a bargain! However, it's unnecessary to go into debt just to be able to own a designer product. This is bad money management to teach your kids. There are some kids who need expensive brands to boost their self-esteem. Discuss what's important to your children. What really defines them?
From the time you children are toddlers, they are already asking for items they see advertised on television. Children need to understand the dynamics of advertising. They need to understand that businesses pay millions of dollars to advertise their products just to entice the consumer. Top psychologist and marketing executives spend endless hours trying to figure out how to get us to spend our money. It's all about consume, consume, consume! Teach you children to avoid getting caught up in the consumer's game. Teach good spending habits.
These simple lessons in
for kids can help your children to learn to become adults who are capable of making solid financial decisions. If you begin at an early age to teach these valuable principles, you will have more financially understanding and responsible children.
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