Teaching Kids about Money

Good financial habits can lead to a lifetime of increased security, and what more do we want for our kids as parents?  Especially in the current financial climate, learning to manage our money wisely is a crucial skill. Devote some time to developing these habits in your kids, and they’ll thank you for it in the long-term.

Work an allowance system. Having an allowance structure in your family home can be a great tool for encouraging your kids to have an understanding of money. Develop a work and reward system in which adherence to assigned household chores and good behaviour results in a weekly payout. It helps to require them to earn their allowance rather than it just being given out regularly for no apparent reason; this system will help them understand that hard work yields rewards.

Encourage them to save. Explain that by putting away a certain amount of their allowance each week, they’ll be able to save up for bigger purchases. Kids can be tempted to blow their allowance each week on candy and comic books, so help them come up with a savings system that will allow them to buy something for themselves that would normally be received as a gift. Even better, encourage them to set aside a certain amount to go toward their college fund, and help them track how much they’ve saved as the years go by.

Teach them to shop wisely. Point it out to them when you select a cheaper item in the store over a similar but more expensive choice. Show them coupons and let them cut them out and use them while shopping.

Encourage them to earn. Long before your children are old enough to get a real job, they can learn the value of a hard days work. Help your kids set up a lemonade stand or yard sale of unwanted toys and clothes. Let them keep whatever they earn, and they’ll soon see how good it feels to work for their own cash.

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