Kids & Money

Money doesn’t grow on trees. I’m sure you’ve been hearing that phrase since you were a child.

Children become aware of the concept of money at an early age. And that is the perfect time to teach them where it comes from, how to spend it wisely, and how to save for the future. What age should parents begin teaching their children about money? Many experts say that if your child is old enough to ask for candy or toys, they're old enough to start learning about money management. The more children learn about money, the more they will be able to make wise financial decisions when they grow older.

All parents want their children to become successful when they grow up but too many parents don't take time to teach their children about the value of money. Unfortunately, many of those children grow up to be adults who struggle with managing their money. The lives of children who understand money, its value and how to handle it, will be far easier than those of children who don’t.

As soon as they learn to count, parents can begin teaching young children how to count money. Practice playing simple games that they will enjoy. For example, place a nickel on the table and next to it place five pennies. Continue using dimes, quarters, and half dollars. Before you know it, they will not only have learned how to count money, but will understand its value as well.

The US Treasury has a web site aimed at teaching children about money: http://www.ustreas.gov/kids/
PBS also has a web site with money topics: http://pbskids.org/itsmylife/money/index.html

Many experts advise not giving children a straight allowance or paying them to do chores they are expected to do. Instead, allow them to earn money by doing extra chores after their regular ones are done. Talk to your children about different ways to make money. For example: babysitting; cleaning out the basement or garage; mowing lawns; raking leaves; or shoveling snow.

However they earn their money, encourage them to set aside a portion of their earnings in a savings account. Let's say your child wants a new toy or game. You can teach them to save part of their earnings for that toy, while still keeping some money available for everyday items, or for going to the movies with their friends. That way they will begin to understand the value of both short-term saving and long-term saving.

If you can teach your children the difference between wants, needs and wishes; that money comes from working; how to budget and how to save; they will know more than many adults. Remember that a good education about money is one of the best tools you can give your children. It will help them the rest of their lives.

Great Books For More Info:

Raising Money Smart Kids: What They Need to Know about Money and How to Tell Them (Kiplinger's Personal Finance)


Raising Financially Fit Kids


Money Doesn't Grow On Trees: A Parent's Guide to Raising Financially Responsible Children


A Kid's Guide to Earning Money (Robbie Readers)


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