Children need to learn about money especially how to manage it. You need to demonstrate the skills on finance management before they practice in the real world.
Once your child have their own checking account, investment or any type of credit, keep the lines of communication open to prevent major mishaps. Read this money tips that could help your children in the future.
Bulding the Foundation
– Learning the basic concepts of good spending and saving habits is ideal for children beginning around age five.
– Take your child to the grocery store and show him/her the cost of different items. Bring a calculator and make your child using it to find the best values while shopping.
Wants vs Needs
– Discuss the thing that you’d like to have vs. the things that you need to live.
– Use currency or other items representing value to demonstrate the cost of items at the store.
Show your child that some toys or other items cost more than others. Talk about the difference in price between different toys or items your child might want.
– Have them select an item of theirs they no longer use to give to charity.
– Have them choose food items from your pantry to donate to a food bank.
– This is a good age to teach your child about giving.
Young Children to Tweens
– At this age, your child may be ready to learn about currency, more complex budgeting and setting goals.
– Giving your child a certain amount of money to budget helps them develop responsible money management skills.
Although parents have various views on allowances, such as if the amount is conditional on work or chores completed, it is up to you to decide what works best for your family.
– Children at this stage should learn the value of different denominations of currency and how to make change.
Short and Long-term Goals
– Encourage your child to set short and long-term savings goals such as her weekly entertainment budget and how much she plans to put aside for more costly items.
– This is a good age to introduce developmentally appropriate concepts of home and our nation’s economy.
– Children are usually too young for checking accouns at this age, but they may be ready for a savings account. If not, you can reevaluate in a few years.
Tween to Teens – Training Wheels
– This is a good time to teach your child about borrowing, lending and how credit cards work.
– Prepare your kids own checking account by showing him how to write a check, use the register and monitor the balance online.
– Kids this age may enjoy earning extra money by mowing lawns, gardening, or babysitting .
– Basic business concepts are an excellent topic for some children. If you have a child with ample motivation and interest in business, you may invest in resources to teach your little tycoon basic entrepreneurship skills.
Teens Almost There
– It’s up to you now to determine if your child is able and willing to manage a checking account.
Investing in the Future
– The teen years often present the best opportunity to learn about the basics of investing such as retirement accounts, CDs, stocks and more. For the responsible, investment-savvy teen, you may allow them to invest small sums in stocks and have them track the results.
– Prt time jobs, odd jobs or even a business for that young tycoon may help faster responsible money and business management skills.
– Learning how to plan for purchases such as cars, homes and college tuition helps your teen easily transition into adulhood.
More About Credit Cards
– Junior may be ready to learn more about how to responsibly use credit. Consider a prepaid debit card, co-signing a new card or adding your teen to your existing credit card.
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