One of the many things that parents should teach their children is how to manage money. You can start teaching your kids about money as early as age five; even children that young can grasp the basic concept of money.
It’s good to start early – far too many teenagers and adults lack basic personal finance skills such as the ability to pay taxes, save money and use a credit card.
Start By Giving Them Money
If your children are between the ages of five and ten, you can start their financial education by actually providing them with some kind of finances; in order for them to learn anything, they’ll actually need money to work with. Institute a weekly allowance in exchange for doing household chores. If the kids want extra money, let them do additional chores. Make your children divide the money they receive into three portions. One portion will be spending money, one portion will go into savings and one portion will go to charity. Help your children learn how to delay immediate gratification by assisting them in picking out items they really want; once they’ve saved up enough money, they can then buy the item.
Go Shopping With Your Kids
For kids who are between the ages of eleven and fourteen, you can bring them along when you shop. Show them how much the things they take for granted cost, and demonstrate how to shop smartly. Some things you should teach your children include how to compare products and prices and how return policies and warranties work. At this age, your children are old enough to start taking on odds jobs such as walking dogs, raking leaves and baby-sitting. With this money, your children can start to buy their own accessories and toys.
Get Them A Savings Account
Reinforce the value of saving by again helping your children select higher-priced items and encouraging them to save up enough to purchase these items. A great place you can direct your children to is the American Savings Education Council (ASEC). The ASEC website has a fantastic online calculator that your children can use to figure out how much money to save each month in order to reach a savings goal.
Once They Get A Little Older
Children between the ages of fifteen and eighteen are old enough to make more serious financial decisions. For example, you may choose to give your children a seasonal clothing allowance so they can purchase their own clothing. If you feel your teenager is mature enough, you can add their name to your credit or debit card and allow them to shop for the family. You can even get your teenager their own student credit card. This is the age to start talking about how to save for major financial goals such as buying a car or paying for college.
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