Money Smart Kids
Teaching Your Children About Money
Wouldn't we all love to raise money smart kids? Good parents raising bright kids will be doing this automatically. These are the kids that grow into mature adults fully capable of handeling their own finances. But isn't there more we can do, just to be sure. Just to be sure they don't make some of the mistakes we made with our money manegement decisions.
If you are doing these five basic steps to teach your kids how to be money smart they will probably be just fine. Start by making sure they have their own money to manage. Yes, this means an allowence. It should be one they get every week. Pick an amount you can live with so when Friday comes around, they get their money.
Child With Money
Along with an allowence should come a list of items that your child will now be responsible for purchasing. This can be the candy at the checkout counter, or it might be CDs or downloadable music from Napster. Just make sure they understand that whatever items are on the list they are now responsible for.
The second step is teaching your kids to save. Saving is an important part of money management and needs to be taught. One way to do this is to offer incentives to your youngsters. The one that works for me is to match their savings dollar for dollar when it comes time to purchase larger items. If the new bike costs $90.00, and they can save $45.00, I'll match their savings and we can go buy the bike. Saving that $45.00 was hard work and may have taken months. It's a pretty good guess that the bike will be very well taken care of, much better than if it were just given to them.
The third step is to encourage work. Sure, an allowance might be contingent on certain chores being done, and that's more than fair. But kids should also be encouraged to do work that invovles pay other than an allowance. Part time jobs are great, paper routes and babysitting are good choices. Some kids clean horse stalls after school for a couple of hours, while others do yard work. Keep the jobs to less than twenty hours a week and your child should have no problem keeping up with school work.
When your children are old enough, talk about money. Discuss family money making decisions openly, this doesn't mean everything, but enough so your children feel a part of the family finances. Knowing that there is so much money coming in every month, and these are the bills that have to be paid, helps them understand why you don't buy them everything they want, whenever they want it. When they begin to understand the family finances they will quit expecting more than you can give them. They will understand some of their needs need to come out of their allowance and their part time job money.
And lastly, let them fail. Let them make a few bad decisions. Let them buy things that will break or not be used, let them learn the value of researching a purchase instead of impulse buying.
Many years ago, like when I was small, my parents knew a little about raising money smart kids. My sisters and I received a weekly allowance. I think mine started at a dime. I would go straight to the five and dime for a candy bar, that I bought with my own money. As I grew, so did my allowance, at the same five and dime I was now buying wooden glyder planes. The candy bar was gone in a matter of minutes but the planes would last for days, sometimes even a week, until my next allowance.
It was not long before I was going around the corner to Grandmas and doing yard work, and getting paid in cash. I would weed, mow grass and shovel snow. I would even brush the dog when she needed it. Later my yard work and snow shoveling branched out to a few neighbors and I was one busy kid. My first paper route was in the sixth grade. By the eigth grade I was station manager for my large morning paper route and every Wednesday several hundred PennySavers were dropped in my drive waiting on me to deliver them before dinner.
I learned at a young age how nice it was to have some pocket change at all times. I also learned the importance of saving. My dad was a big help with that because he knew the value of offering incentives. We would go to the local hardware store where I would drool over this new football. When I had saved enough, we went in halfes on it. That's how I got my first bike, my first set of snow skiis, my first bb-gun and my first bow and arrow.
Raising money smart kids is not hard and the lessons they learn will last a lifetime.
Pages related to Money Smart Kids
TV And Children :
Raising A Gifted Child :
Reading And Children
Home Schooling :
Teaching Your Preschooler :
Summer Camp
Educational Baby Toys :
School Reform :
Back To School
