Teaching Children About Money
Posted by Adrian Addison on Monday Mar 23, 2009 Under Children, Parenting, Parenting Tips
Parents should keep these guidelines in mind as they begin the financial socialization of their children: guide and advise rather than direct and dictate. The life-long benefits of teaching children good money habits make it well worth the effort. It is vital for the healthy development of children that parents talk about these feelings and opinions and establish a consistent approach to teaching children about money. When teaching children about money, parents need to make an effort to think in children terms, not adult terms.
Teaching your children about money is more than preparing them for employment or teaching them to save some of the money they earn. Teaching money concepts is focusing children education about money on the notion of earning, spending, saving, borrowing, and sharing.
Too many parents don’t take time to teach their children about the value of money, and unfortunately, many of those children grow up to be adults who struggle with money management skills. The more children learn about money, the more they will be able to make wise financial decisions as they grow older.
Parents can begin teaching young children how to count money, before you know it, they will have mastered the art of not only counting money, but understanding its value as well.
What age should parents begin educating their children about money? Financial experts agree that it’s never too early. The more children learn about money, the more they will be able to make wise financial decisions as they grow older.
You can teach them to save part of their allowance for that bike, while still keeping some money available for ice cream, or for going to the movies with their friends. It’s never too early, also, to teach your child different ways to make money. Sit down with your child and brainstorm with them on some ways they would like to earn money.
Teach them basic money management skills and their future will be brighter. Paying an allowance provides a way to get children involved and creates “ownership” of the decisions they make when they’re using their own money. It’s also important to look at an allowance as a tool to allow children to make some money mistakes and you have to expect them to make some. In essence it is a way for them to learn big lessons with small amounts of money at an early age. My view is that it is better to make mistakes earlier with small amounts of money than make mistakes later in life when the amounts involved can be much larger.
It’s not the age but rather the aptitude that matters when your child begins to understand that money can be exchanged for things he or she wants, then you will know it’s time to start discussing the concept of an allowance. Remember that money and paying for things is an abstract concept; some children will show an interest while others will not, so be flexible.
Also, paying an allowance will give children and you more control over their money if you don’t pay an allowance, they may still get money out of you for the things they ask you to buy for them anyway. For example, if you pay your kids an allowance for doing household chores, then what happens when they later begin to earn more money from a job outside the home? Paying a regular allowance to one child and handing over money whenever asked by another will foster different money habits between children of the same family.
