Children and money
Children need to be taught about money. They are never too young to start learning money management skills. Children learn their money habits, values and principles by watching and listening to parents and others around them. In fact, one doesn’t have to say anything to pass on good and bad habits. All family members feel the pinch when money is tight, therefore, open communication is important.
Tips for talking with children about money:
· Communicate with children about money – Involve the family members when making decisions about money. Children grow in understanding and self-worth when they contribute to the resolution of financial issues.
· Teach the different between wants and needs – This will help with good decision-making in the future.
· Help children set goals – Every time a child asks for something such as a toy, clothing, etc. is a chance to teach goal setting.
· Savings vs. spending – Have children learn to save by putting a small amount in a bank weekly. Talk about saving a percentage of their allowances and gifts.
· Help them start a record keeping system – Keep receipts and keep a journal of where and how their money is saved and spent.
· Let them make spending decisions – Decisions may be good or bad but each is a learning experience. Help children learn to do research before making major spending decision. Ask what else the money could be used for.
· Teach about debit and credit cards – When using a card for paying in a restaurant or store, explain how it works and the importance of checking the amount and how to use them correctly to avoid fraud.
You can start teaching children about money at age 4 or 5. That way by the time they graduate they will be good financial managers.