Teaching people money management skills cannot begin too early. Learning to manage your money at a younger age can often help people avoid financial trouble as they get older. Today, children are exposed to money, whether its credit cards or checks, at a much earlier age. That’s why it’s so important to start teaching your children about money as early as elementary school.
Below are some suggestions that can help you explain money management to your children today.
1. First teach children the value of money. Explain to them that it takes hard work to earn money to pay for everything you need and want.
2. Help the child to understand that first you must pay for everyday items like food, clothes and household expenses before you can buy something for fun.
3. Show children money management by example. Explain to them how you make an actual financial decision.
4. Talk to children about things you want, but cannot buy until you have saved enough money. Everyone has to say no to themselves now and then.
5. Do not pay children for regular, everyday chores. These chores teach them responsibility.
6. Do provide a regular allowance and give them the opportunity to earn extra money by doing additional chores. Encourage them to put ½ their money in savings.
7. Keep your child’s money separate from your own.
8. Open a savings account for your child. Many banks offer this for free for children.
9. Teach your children about credit and credit cards. Explain how they work, why people use them and what happens if they are misused.
10. As your children get a little older, teach them about checking accounts and ATM cards. At some point, they may want their own checking account.
11. Make suggestions to children, but do not tell them how to use their own money.
12. Everyone makes mistakes with their money. Be sure to discuss the mistakes your children make and give them guidance as to how not to make them again in the future.