Teaching Children about Money

Teaching Children about Money

How will you do it?

Every parent teaches their child important lessons about money. You want to make sure that you're teaching the right lessons; and not ones that reflect attitudes and behaviors you're not proud of. Or worse - that you're unaware of. Teaching children money management skills and positive attitudes about money means that you need to find concrete ways to relate the lessons you want to teach to your child's everyday life.

Age Appropriate Money Lessons

Little learners just love to hold coins in their hands. One great teaching method is to reward 4 and 5 year olds by letting them keep the coins they find lying around if they can name them. The brown one is a penny. The big one is a quarter. This is great motivation for learning the names of coinage. As they get older, they can only keep the coins if they can attach a correct value to it. And even older kids can only keep found change if they can figure out how much more it would take to equal a dollar.

Once children reach 6 or 7, they are ready to learn the power of earning and the concepts of scarcity and choice. To make these abstract ideas more concrete, let them experience the joy of giving to charity, the power of making money for doing specific chores and the choice of how to spend a dollar at the store.

Pre-teens and older children are usually eager to learn investing and saving strategies; if you can show them exactly how it's related to their lives. A family conversation about whether to save for a big vacation down the road or a smaller one-day event at an amusement park (much sooner), is a great way to make their money choices concrete. Of course, saving for a new game or night out with their friends is very concrete too.

Does Money Grow On Trees?

What if your own history of money management hasn't been the best? Don't worry, even if your credit card debt is high or your savings account is low, you're still in a good position to teach your child better skills. The true secret is to have an on-going family conversation about money. It might involve a discussion of paying yourself first. Let your children know if you waited too long - but are doing it now. Let them know that they can make mistakes surrounding money and learn from them.

The classic comment that "money doesn't grow on trees" is a fun way to start a family conversation. What does this mean? Is there a scarcity of money in the world? Does knowledge lessen risk? Even if you don't know the answers yourself, inviting your children into the conversation of money puts them in a great position to learn control over money, rather than fear of it.

Keep looking for lessons to teach your children as they get older. Be proactive in helping them establish checking and savings accounts at the appropriate times. Remember, there is no public school curriculum for money management. The lesson plans for attitudes and behaviors surrounding money are taught in your home.

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