What are you doing to provide financial education for kids? If parents do not do their job in teaching money management to children, there are lessons being taught by the world that will lead the child to financial ruin. Poor money management skills can leave a child deep in debt by a very young age.
One useful tool that you may want to try is a simple allowance. If the child is under nine, it is likely that a very small amount will be sufficient for his allowance. As he grows older and shows responsibility with the small allowance, the amount should grow. As the allowance grows, the child can become responsible for his own entertainment or toys.
A child’s greatest teacher is what his parents are doing with their money. Parents that are constantly overextended and living beyond their means teach a child that this is an acceptable way of life. Learning to properly handle your own finances will teach your children how to do the same thing.
Look for teachable moments in a child’s life. If the child wants an expensive item, use the moment to teach them about the source of money in your life. Let children see you clipping coupons and comparing prices. Teach delayed gratification to your children.
When your child grows older, they may want opportunities to earn money. Offer to pay the child for larger duties around the house. Eventually the child can look for opportunities outside of the house. At first he may work for neighbors, but eventually he may be ready for a summer job.
One important lesson that must be learned is giving. Even with a limited income, a child can learn to give to something other than his own wants. Pennies here and there add up when combined with other children’s giving and can make a large difference in someone’s life. Perhaps your child will want to give to help children in third world nations who need food, clean water or medicine. Giving is the third alternative to saving or spending.
Financial education for kids is often a difficult task. Children need to know that money is a tool that can be very beneficial if used correctly. If money is not used correctly, then it can cause major problems for young adults that follow them for many years in the future. Good training on the proper use of money can help a child to succeed.