Posted by: Ofer Aronskind | August 7, 2011

Teaching Your Kids About Money

Math, history, science, physics and chemistry are some subjects that your kids learn at school. Unfortunately, money management skills are not standard in most school curriculums. Most of us are still at a learning age when it comes to personal finance management. With every failure we learn a lesson and often we think we could have avoided many unfortunate financial results if we were taught some more lessons while we were young. Yes, it is true that money lessons must be taught since the tender age so that you don’t grow up drowning in a sea of debt and half of your youth is gone searching for professional debt help companies.

The earlier you start imparting the knowledge of finance to your kids, the better! If you teach your kids about finance management, this will ensure that they’ll have plenty of practice when they’re old enough to start taking serious monetary decisions. You may be unsure about the techniques that you have to adopt in order to familiarize the importance of money to your kid who knows nothing about it. Take a look at some kid-friendly techniques that you may adopt to instruct your kid on money management.

  1. Make them earn money in any little way possible: One of the best ways that you may adopt is to make your kids work to earn their own income. All young children can do some particular things like cleaning their room, gardening, feeding their pets. Usually, kids are more likely to spend their money more carefully when they know how much effort has been given behind the job getting done. They’ll learn to respect money if they get small amounts for the work that they’re doing.
  2. Make them acquainted with a bank: Take your kid to the nearest bank and make them familiarized with what it is and how it works. Though a piggy-bank is fit for your kid, but he also needs to be informed about the bigger picture. They must be aware of the role of banks in the financial transactions within the nation. Open a bank account for them and make them save money in that account.
  3. Teach them the significance of leading a frugal life: You go to any financial expert or visit any financial blog; you’ll find frugality to be the most important practice that can ensure a fiscally fit life. If your kids do not grow up with frugal habits, they cannot manage their money and this may lead to accumulating huge amount of debt in the near future. You too have to practice what you’re preaching so that they learn from you. Teach them the striking difference between needs and wants so that they know which one to prioritize.
  4. Set spending caps for the money that you pay them: As you’re already paying them small amounts of money for their household chores, make them spend their own money in getting some petty things for themselves. But you must set a spending cap or limit their expenses. Set a monthly budget for shopping and entertainment and if they blow off the budget in the very first month, let them know that they’ll not be spending a dime further in that month.
  5. Encourage them to get early jobs: Though the employment level is not very encouraging for your kid, yet leave no stone unturned to boost them to get early jobs. Tell them how much it is important to earn your own money and save it accordingly to avoid debt. They must also be academically alert so as to grab a job as soon as possible that is in accordance with their qualifications.

Highly disregard impulsive shopping and do not practice anything opposite to what you’re preaching them. Your kids look up to you and try to follow you in every way possible. Make sure you give the best lessons to them so that they don’t mismanage their finances and require running to debt help companies in the future.


This guest post was written by Rick Murphy

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Responses

  1. I really like the post. It is definitely a good idea to teach your children about money. If you don’t teach them the basics they will just spend money like it’s worthless. Once a child can understand the concept of money, they will appreciate everything much more.

    Also teaching your kid about money will help them later on in life.

    • Thanks for the great comment!


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