What are you doing to provide financial education for kids? If parents do not do their job in teaching money management to children, there are lessons being taught by the world that will lead the child to financial ruin. Poor money management skills can leave a child deep in debt by a very young age.
Teaching children money management often begins with a small allowance. For children who are under nine, the allowance should be very small. As the children pass 9, you will want to increase their allowance, but make them responsible for their own entertainment and toys. Giving such responsibility teaches the child the value of saving.
Remember, children learn more by what you do than what you say. If you live a life filled with debt and beyond your means, it is likely that your children will grow up to do the same. By living within your means, you child learns to buy only what they can afford.
Always watch for teachable moments in a child’s life. If a child wants something they cannot afford, the the child about delayed gratification. Let the child see you making choices about affordable purchases and waiting until something can be afforded.
As your child gets older, give them opportunities to earn money. The opportunity may be for bigger chores at home such as mowing the lawn. Eventually, the child may mow or rake leaves for neighbors, have a paper route or even a summer job. Money that has been earned by the child will have more value than money just given to them. The child should be able to decide, within reason, what to do with earned money, but must also learn to live with the consequences.
One important lesson that must be learned is giving. Even with a limited income, a child can learn to give to something other than his own wants. Pennies here and there add up when combined with other children’s giving and can make a large difference in someone’s life. Perhaps your child will want to give to help children in third world nations who need food, clean water or medicine. Giving is the third alternative to saving or spending.
Financial education for kids is often a difficult task. Children need to know that money is a tool that can be very beneficial if used correctly. If money is not used correctly, then it can cause major problems for young adults that follow them for many years in the future. Good training on the proper use of money can help a child to succeed.
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