5 Money Lessons You Must Teach Your Kids
by Joy Mali WriterTeaching kids about money is a crucial life skill that
should be taught as early in life as possible. The quicker kids learn that
money does not grow on trees, the quicker they begin to grasp the concept of
saving money and working hard for what they want. What kids need to learn
regarding money goes beyond what they learn in school. They need to be taught
about the value of money and why it should be saved. In school they will learn
how to add money, how to calculate interest and how to make change. The
intrinsic value of the dollar and what it should mean to them needs to come
from home though.It is also the job of every parent to discuss credit, its importance
and even talk about checking credit to ensure its accuracy.
Teach the Difference Between Needs and Wants
Kids need to understand the difference between needs and wants early in life.
While this can be a difficult topic for them to grasp, it is essential to
continue teaching it as often as possible. For young kids, parents can use
simple examples, such as a cookie or a small toy. Parents can explain to
children that are begging for either item that while they might really enjoy
having the cookie or a new toy, it is not something that they actually need.
Teaching kids that needs are something that is necessary for survival early in
life will hopefully help to prevent them from becoming excessive spenders as
they get older.
Talk About Budgets
Even young children can learn the basics about a budget. The younger that
parents begin to teach kids about keeping
finances organized the more natural it will be for them in the future. Talk
to kids now not only about the importance of saving a portion of the money that
they earn or that they receive for gifts, but also about paying bills, buying
necessities at the store, giving to charity as well as saving. Kids need to see
just how far a dollar can go and how adults divvy up that money on a daily
basis in order to make ends meet. This important lesson can also help kids get
the full picture when it comes to money, not just that they have money in their
hand and need to go spend it at the store.
Savings not Just in a Bank Account
Children will typically mimic the habits that they were taught when they were
growing up. Those kids that grew up with parents that used coupons, comparison
shopped and truly thought about every purchase before spending money are more
likely to have budget conscious children. It is never too early to teach kids
about what coupons mean and how they work. This could be a very valuable lesson
in kids’
money management. Giving kids a hands-on lesson with coupons could help to
get the point across even further. When a coupon is used, parents can give the
child the amount of money that was saved with the coupon. This can help them to
get a visual of what exactly was saved. After doing this a few times, they can
physically see their savings add up, helping to drive home the importance of
saving money in every way possible.
Give an Allowance
One of the best ways to teach kids about money is to give them an allowance.
This gives them the chance to learn how to earn money as well as how to manage
it. Talk to children before giving the allowance and set some parameters so
that they know what is expected of them. Their allowance should include room
for negotiations as well as the opportunity to teach them about saving,
spending and even paying bills.
Set Goals
Another great way to make teaching
kids about money easy is to help them set goals. If there is a certain item
that they want to buy, help them learn how long it will take to save up for
that item. Help them put the money in a savings account and watch the interest
grow. When they reach their goal, celebrate with them as it is very rewarding
to have the stamina to save for a large item.
Teaching kids about money does not have to be difficult or stressful for
parents. The earlier that the lessons start in life, the more likely kids are
to grasp onto them. Talking to kids about all aspects of money including
working hard for it, saving it, using it to pay bills and purchasing things at
the store will give kids a full view of what they are to grasp about money,
setting them up with a solid foundation for life as an adult.
Joy Mali is an active blogger who is fond of writing articles on Bad Credit Loans and advising people to get mortgage even with bad credit. Follow her on Twitter to know more on things to teach kids about money management.
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Created on Dec 31st 1969 18:00. Viewed 0 times.