Teaching Your Children Money Management

The only way to fully prepare your children for what is to come in the future is to teach them about real life situations and involve them in real scenarios. Money management should not be something you only worry about when you get older, children can learn about money as well, and the importance of good spending habits. Naturally, children will repeat what they are taught or more so what they see. If you are diligent about your money management skills, teaching kids about money management should be a smooth transition.

Allowance

Did any of you look forward to doing weekly chores just so you could get your allowance? Chores are never fun, but they teach children the concept of working for their earnings. If they are consistent in doing their chores weekly, they will receive money for what they have done. Some children may decide to take on more chores, while some may be content with the couple that were given to them. This is a great concept that also givesparents a break on some of the household chores!

Grocery Shopping

Kid’s money management is going to be different and on a much smaller scale than an adult’s. It can be looked at as more of an opportunity to make your children aware of money and the value of items. Most young children have absolutely no concept of what a dollar truly is. They may know they can go to the dollar store and get one toy. Eventually they will start learning about money in school, and as a parent, it is your job to plant that seed and apply the same knowledge at home.

Grocery shopping can easily become a learning experience. Price comparison is something that can be looked at but you can also teach your children the difference between paying for a brand name, and shopping for value. Here is an idea: give your children small shopping lists, and see who can save the most money at checkout time.

Savings Account

Once your child is receiving an allowance and starts grasping onto the concept of money, it is not a bad idea to open up a savings account for them. You may already have one open and if that is the case, allow the child to start making deposits into their own account. They receive a running total on the amount they began with, deposited, and their ending balance. This will give a visual as to what happens when you put money away.

Moving on to children who may be in middle school or high school. Teaching them about investing at that point may really open their eyes to what they can do for themselves if they are smart about money. Honestly, if they are making decent deposits into an account like a Roth IRA and start from an early age – they are securing a solid place for themselves later on in life.

For The Parents

Monitoring your credit regularly is part of a normal routine. As mentioned before, children pick up the good habits their parents do as well. Once your children are a little bit older and can handle the topic of checking a credit report and score regularly, you can print one out and go over the information that is on it with them. As another visual, they will understand the importance of paying bills on time, and the negative effects if they do not.

Good money management skills should definitely be something you consider teaching your children from a young age. While it not only better preparing them for the future but also making them aware that everything costs something! You may slowly start to see changes in your children asking for an item every time you walk into a store if they understand that everything has a price. It will become more of an instinct for them to gravitate towards items that are of equal value but cost less. They will also understand that you do not need to pay for a brand name when you can get the same item elsewhere and save (possibly for that toy or another deposit in their account.)

Amy Johnson is an active blogger who is fond of writing articles on credit monitoring and educating people to monitor their monthly credit report to prevent you to be a victim of credit fraud. Follow her on Twitter to know more on how to teachabout children money training.