Brought to you by: Breez DeGuzman
You may have heard the saying “money doesn’t grow on trees.” You may have even told your children the same thing. Here are ten ways you may want to try to teach your kids about money.
When you decide to teach your children about money is something you and your partner will want to discuss. They will obviously learn something about money at school, but you may want them to learn some specific things:
* How to earn money by having a job
* How to save money by setting aside money for larger purchases
* How to budget by limiting how much is spent each month to ensure needs are met prior to purchasing things they want
Don’t be afraid to talk about your family’s finances. Talk about what you do for a job and why you work. Explain to them that you have monthly bills that must be paid. Tell them about how banks are used to hold money and disperse it to pay people.
1. If you don’t currently have a budget, take the opportunity to do that as a family. This allows everyone to understand what money comes in and what goes out each month.
2. Show them your paycheck and how much is taken out for withholdings. Explain what each item is and why it’s important.
3. Let them watch you fill out the deposit ticket. Show them how you can keep some money out as cash and the rest goes into your checking account to be used.
4. Pay your bills with them watching. Explain why you choose to pay bills according to due date and what happens if you’re late in paying them.
5. Tell them how long you have to work to pay for things. If your telephone bill is $50 and you make $10 an hour, it would take you five hours to pay that bill. This may help them understand the value of money a little better.
6. Some families use credit cards. Tell about the potential dangers of using them; that it’s easy to buy things you really can’t afford and that you will end up paying more for those items in the long run due to interest.
7. Consider giving them an allowance so they understand how to earn, how to save, and how to comparison shop to get the best deals. Real life experiences – whether positive or negative – may have more of an effect on your child’s learning than what you say.
8. Discuss how having money comes with responsibility. While it would be great to be able spend everything they have, that’s not a good idea. Teach them to save first, be charitable, and then spend money responsibly.
9. Allow your children to make mistakes with their allowance. If they spend everything in one day, it will help them understand the concept of budgeting when they want something later in the week. Now would be a good time to ask them to work extra to get extra money to pay for something.
10. To teach them to budget, have them write down what they “want” and then prioritize the list. Explain how to save up for larger items, like an mp3 player, by setting aside a little bit out of each week’s allowance and still have some to spend each week.
These ten ways to teach your kids about money are by no means all available. Think about your family and its needs. Then choose one of these methods or another that will best meet your goal of teaching your children about money.
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