|Gregory Thomas is the editor of
SavingSecrets.com. SAVING MONEY IS AS EASY AS 1...2...3! WANNA LEARN HOW?
Hop over to our web site and find FREE money-saving articles, a FREE bi-weekly
"Money Saving Tips" newsletter and even a FREE Ebook download titled "Coming Up
With Some Xtra Cash" just for stopping by! Click Here - -
We take it for granted that children know how
money gets into our wallets. The tips below will guide you through teaching your
children the value of money.
Now I'm not referring to the value of stocks and
bonds, compounding interest, or the current market value of a U.S. dollar.
What every child should be taught at some time
is: the purpose of jobs (how we earn money), saving for goals (how to save
money), limit needless spending (how to budget).
It's up to you to decide when and at what age it
is appropriate to discuss these topics. But keep in mind that if you don't teach
them the skills to make educated, responsible decisions with their money, you
will be holding back a valuable lesson that should be taught.
Learning how to successfully manage money is a
skill they will have for life.
Where To Start
Don't assume your children know the meaning or
purpose of a job, bills, banks, etc...
Let them see you pay your bills. Explain to them
how you have 'X' amount of dollars per month to pay for everything. Point out
the dangers of getting into debt (credit cards). Explain that ATM machines are
not magic money dispensers that give you as much money as you need, for free.
Learning comes from experience. Just talking
about money will not get the job done. Learning how to earn, save and spend
money appropriately comes from real life experiences.
If your children do not have an allowance
already, think about starting one. Only when they have their OWN money to
manage, can they put your lessons into practice.
When you are discussing allowance with your
children, relate it to your own life. Explain to them that when you want to buy
something, you must first work to earn money, then save enough money in order to
purchase it ie: car, house, clothes. Tell them that if you don't go to work and
earn money, there's no way you can afford to buy what you want.
You can then explain to your children that if
they want to buy a new toy, they must earn the money in order to buy it.
It's Up To You
You can design your child's allowance and chores
however you see fit: weekly, bi- weekly, monthly, pay-per-chore.
One method that's effective is designating 'X'
number of chores, for 'X' number of dollars per week.
For example: "Johnny. You will earn $5 a week if
you do these jobs/chores: water the lawn (twice), take out the garbage, vacuum
the house (twice), and feed the cat everyday."
It's up to you to develop a list of chores that
can be done around the house and an appropriate allowance amount to go with it.
In other words, you shouldn't have your child painting the whole house for a
You should also be sure to make the jobs/chores
age appropriate. A twelve-year-old will be able to do more than a seven-year-old, so take this into account when thinking of chores.
Now don't confuse allowance with the basics.
What are the basics? Keeping their room clean. Doing their homework. These are
jobs that should be done without question. Period.
Once You Start
When your children earn their allowance for the
first few times, they will want to immediately go and spend it. Fear not. This
should be expected. Here is where you can start to teach your children.
Sit down with your children and talk about the
"things" they want to buy. Have them prioritize their items on a list, in order
of importance. This list can be considered their "Goal Sheet" - the reason they
are saving their money.
Have them keep this list in their
wallet/purse/piggybank, so they will always be able to look and see what they
are saving for. You should also keep a copy of this list just in case they lose
it, or want to purchase something that's not on it.
The next time you are in a store, and your
children want to use their money to buy something, first ask them: "Do you have
your wallet/purse that has the money you've been saving?" You can then ask them
if that particular item they want to buy is on their list.
Asking these questions will get them thinking
about the item's importance. Is it more important than the other items on their
list? Let your child make the decision whether to buy or not.
Regardless of what you say, more than likely your
children will make the purchase even if the item is junk. That's ok! This is a
lesson your child must learn. Only when the initial thrill of the toy wears off,
or when your child realizes that the other items on his/her list were more
important, will they begin to understand the value of their money.
These are only some of the possibilities you
might want to look into. Regardless of what you can take from this article,
adapt it so it fits into your family lifestyle.
Money management is a learned skill that comes
from real experience. It is very important that children learn the value of
money and the role that it plays in our lives. Teach them how to make smart,
educated buying decisions. Stress the importance of setting priorities and
working to achieve that goal.
Once your child achieves one of his or her goals,
they will understand what it takes to be successful. They will know how to
budget their money and limit unnecessary spending in order to buy what they