5 Basic Concepts To Teach Kids About Money

piggy2.gifOne of the most important life lessons you can teach your kids is to develop successful money management habits  and  a sense of financial responsibility. When it comes to teaching your kids about money, the sooner they learn the better.

  1. Help your child understand the value of saving money.  Here is where you start showing them the importance and the  benefits of saving money. This can be done with a simple but balanced form of an allowance. While they are young, giving them small amount of money will help them prepare for the future when the amount becomes larger.
  2. Discuss the privileges and pitfalls of owning a credit card.  Show that credit cards can be a very powerful tool which could help you dramatically with your finances and also in return, how you could misuse a credit card and how much that could affect your life.
  3. Give your teen ‘real world’ experience with money and budgeting. Instead of buying their yearly school clothes yourself, give them a set amount and let them decide what they need and what they don’t need. Emphasis that that is all they are getting so chose wisely.
  4. Teach your child how to track spending. Get them in the habit of tracking their spending by either getting a notebook or a creating a simple excel spreadsheet on your computer.
  5. Cover the basics of investing. It’s never too early to start explaining the general overviews of investing. The earlier you start, the better they’re equipped when it’s actually time for them to start investing.
  1. I agree. We should teach our children to use money and credit cards and do it from the earlier childhood. Children can take valuable lessons of money use through the interaction with parents. Take them to supermarket or bank. Such every day activities can teach kids about money and budgeting. There are really varios number of methods. You can invent your own and more effective way to educate your child and see the results. Good luck!

  2. I like this gentle advice. I am particularly in favour of #3 – give them an allowance to spend on these essentials. The other four suggestions will naturally follow as they begin to learn the ins and outs of handling money.

    Thanks for this.

  3. I agree that Rory. I like number three.

    I also find that #5 is extremely important. I’ve asked my dad many times to teach about investing when i was in high school and he kept saying I’m not ready.

    Investing and finance is something that should be tauhgt in school. Unfortunately, we only really learn about it after we finish college once we are on our own.

  4. I think you should emphasize the value of living debt free. We live debt free and we expect our kids to do like wise.

    We also emphasize money comes from work.

    Our kids have their own checking accounts and they must be in balance at all times. We give them money they earn each month and it can be used for everything including clothes and entertainment. When it is gone it is gone. After a couple of times of spending too much on foolish items the pain of being broke sends an important lesson.

    We also emphasis the evils of credit cards and consumer debt.

    Ten percent of all they earn must saved or invested.

    The lessons and examples you provide now will protect your kids and family in the future.

    Good message

  5. Put “fun” in your finances! That’s one way of teaching kids how to save money! I do it by ordering my personal checks online and I get to put some creative images up front. My kids learned how to do bank transactions (deposit only, of course, with my proper guidance)because of my Mickey mouse checks, Tinkerbell checks and My LIttle Pony checks! If you want to take a look at more of these 50%-off unique checks, click here .

  6. I was looking for something else when I saw your blog.Great Post.Thank you!

  7. Hi! I was surfing and found your blog post… nice! I love your blog. :) Cheers! Sandra. R.

  8. I think that teaching kids about money is really mandatory. It seems that the biggest influence on how you handle money is by watching the good things your parents do and eliminating the poor choices if that is the case. I was glad that my kids had to take financial management classes in high school. I wish I had taken some way back then.

  9. Frugal Tips For Saving Money - pingback on September 16, 2009 at 3:23 pm

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