How to Teach Your Kids About Money

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  • 3/4/12
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  • Helping a Child Learn About Money
    Teaching Kids About Money
    Young children know little about money and making good financial decisions, so it is up to you to instruct your kids about spending and saving. Teaching them now will help them build the foundation for a solid financial future. By the time they are 4 or 5 years old, children are ready to start learning about money.

    Consider the following tips to help you teach your kids how to handle money responsibly.

    1. Talk to your kids about your credit card when you use it to pay for something. Explain how it works and that the bill must be paid at the end of the month. Tell your child what interest is and how it will accumulate on unpaid balances.

    2. Give your children an allowance for special jobs, but do not give money for basic responsibilities such as making the bed. Pay for jobs that are beyond the child's usual realm of responsibility, such as cleaning a closet or weeding a flower bed.

    3. Open a savings account for your kids. Help them fill out the deposit slip, and have them go to the bank with you to deposit their money.

    4. Consider matching your children's savings to encourage them to put money aside.

    5. Show your children how to comparison shop. When they express a desire for a certain toy, note the price in several stores and online. Your child will probably be surprised at the savings that can be gained with a little research.

    6. Encourage a strong work ethic. Show your children that it is important to work hard and do their best. People who work hard will make more money than those who do not.

    7. Help your kids make money goals. Setting goals helps kids make decisions, learn discipline and work hard to achieve success. The process also helps kids develop confidence and self-esteem.

    8. Set a good example with your own money habits. Establish a budget if you do not already have one. Let kids see you set up a savings plan for items you want but cannot immediately afford.

    9. Teach your kids the importance of giving. Help them discover how good it feels to donate some of their money to a charity.

    Image Credit: Morning Calm News
    Written By: Shannon R

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