As your little one grows older, they will eventually learn about money with or without your help. However, if you make a conscious effort to teach your child about money, they are much more likely to value it. By giving your child a financial education early on, you can help them learn to be responsible with their cash. You also can help them escape the belief that parents have unlimited money if you talk to them about how much things really cost and where money comes from. By introducing them to the idea of comparing prices and products, having them interact with you at the grocery store or by encouraging them to actively save for something at home, you can introduce the concepts of ‘budgeting’ and ‘saving’ in an age-appropriate way. In most cases, the more practice that kids have when they are young, the more likely they will actually be able to hold on to their money later in life. Here are a few ways to get started.
1. Get your child used to the idea of chores and allowance.
When your kids are really young, they probably won’t have an allowance or chores. However, as early as 2 years old, most children can do some small chores. Tasks such as putting a plate in the sink or clearing up their toys are a great place to start. While this may be too soon to start giving your child an allowance, just encouraging your children to do small chores around the house is a good step.
Once your child is old enough to understand the basics of money (as early as age 4 or 5) consider giving them an allowance. This does not need to be a large amount of money, and can be proportional to your child’s age. (One popular idea is to give your child 50c or $1 a week for each year of age, ie a 6-year-old would get $3 or $6 a week, while a 12-year-old would get $6 or $12) Doing so gives you the opportunity to teach your child about ‘saving’, and by earning the money (through chores), you’re child learns the value of money.
2. The magic of saving
You can begin teaching children to save their money at a very young age. For instance, if your 8 year old wants a new doll that costs $20, but she only gets $4 a week allowance, explain to her that she will have to save for 5 weeks. Keep in mind though that children will need to be reminded and encouraged to save their allowance every week. Try to keep your child motivated by making the process fun. Buy a money box or piggy bank that your child will love, or create on yourself with your child.You could also consider matching their savings when you think that that they are saving for something worthwhile. If you do this, make sure to explain why you are willing to do this. For some fun piggy bank ideas check out these great piggy bank ideas! http://brightnbrainy.com/?p=542
3. Teach your child to respect their (and others) property
You can teach your children a lot by encouraging them to value their own property and the property of others.By teaching your child to care about the things around them, you teach them to be satisfied with what they have, and to be grateful for the blessings that they do have. The way you teach your child this lesson will depend on his or her age. If you have a toddler, you can approach this several ways: You may try to play make-believe. Explain to your younger children that if they throw their doll across the room, it can hurt dolly’s arm or leg, and if they continue to do it, perhaps take the doll away for a while. Tell your child that dolly will come back later when she remembers not to hurt dolly.
With older children, if they damage something as a result of irresponsible behavior you could consider making them contribute to the cost of repairing or replacing the item, or you could confiscate that item or another item for a while. Just be sure to explain to your child why they have the given consequences.
4. Set a good example
Most younger children enjoy playing copy cat, and will often emulate their parents’ behavior, so if they see you saving, they will also want to save. You can set a good example by having your own savings jar for special treats, and by showing your child that you look after your property just as well as you expect them to look after theirs. When taking the children with to the grocery store, try to stick to a grocery list, and speak to them while doing the shopping. You can have the older children help with comparing the price of items, or by counting out the amount of a given fruit or vegetable, explaining to them that you are only going to buy as much as the family needs so that you don’t have to waste any.
5. Make learning about money fun
Most kids will be more interested in learning about money if you make it fun for them. You could make or print a savings chart for your child. Make your child a part of the process. You could get out the chart and have your child sit with you while you fill it out, or if you have a child who can write, allow them to write in the numbers themselves. Also consider a money game, like PBS Kids’ Mad Money or even the classic monopoly for older kids. A money app for kids could be another great way for them to learn about money. Virtual Piggy Bank (Android) and Savings Spree(Apple) are two great ones to start with.
By taking the time to teach your child a few of the basics you can help set them on the path to financial stability later in life. Showing them that small changes can have big results may end up being one of the most important lessons you teach your child.
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