Finances - Teaching Money Lessons To Children
"An investment in knowledge always pays the best interest." - Benjamin Franklin
We warn our children about strangers, alcohol, and drugs. We try to model healthy eating and exercise habits. Yet, in the hectic pace of life, many parents neglect to teach their children one of the most important survival skills of all—how to take care of themselves financially.
Parents are great about teaching kids how to spend money, but this is actually setting them up for failure later in life. The emphasis on buying power comes at the expense of other important money skills that kids need to know about, such as earning, saving, and sharing.
When it comes to teaching children about money and personal financial responsibility, the earlier money lessons are learned, the better off your child will be. You can simply start by teaching your children about allowance. As your children earn money from chores and other duties, teach them how to save money in a piggy bank, in a box, or a real bank-just so they are actually saving money earned. Be sure to help your children set savings goals. Show them how their money adds up and grows. Be sure to let them spend the left over money, but let them choose what they would like to spend it on. If they do not make the right spending decisions, then let them suffer the consequences. This only makes them wiser in their spending habits. If your children want bigger items, like a bike, or a play station, don’t just go and buy those items for them, encourage them to save their money to obtain such things, and even if you have to match them with a certain amount of money, that’s fine. After your children save up to $50, open up a savings account at your local bank and go over bank ledgers, statements, and interest with them, so that they understand and get a sense of what saving is all about. Once your children are old enough to work a part-time job, you can encourage them to save more money, and to even look into other “savings” options like “investments.” Remember, if your children see that you are good and wise with your savings and finances-then they will more likely to follow in your footsteps.
You can start today and get on the right track teaching your children about money. A wonderful avenue to begin your journey is “Young Americans Bank” the world’s only bank designed specifically for young people and is located in Denver. Young Americans Bank is a real bank and offers products like checking and savings accounts just like other banks do. However, the bank’s uniqueness is in its focus specifically on young people and helping them develop smart money management habits at an early age.
For more information log on to http://www.yacenter.org.
Other great resource for kids to learn to deal with money is: http://www.federalreserve.gov/kids/default.htm.