Wednesday, May 23, 2012
How to Teach Your Children About Money
1. Write a Check
Once while grocery shopping, my child wanted a few extras. I explained I had no money for that. My child then said, “Just write on that paper that you usually write on.” My child was referring to my checkbook. Children are very observant. They need to know that you just do not write a check any and every time that you desire something. Also, they need to know that the money needs to be in the account before you write a check, so as not to have (insufficient funds) resulting. When this happens, you may receive extra charges, which results in even less money for you.
You may or may not want to give your child an allowance. If you decide to give your child an allowance, make it clear they are to save a portion of it. Also, remember that the money was God’s money first. Impress upon your child to tithes 10% of their allowance first before saving or spending the balance.
3. When to Start
Starting when a child is a toddler is not too early to teach your children about money. Give your child a piggy bank. Start contributing. You and your toddler can decide when and how often that you will contribute to the bank. The important thing is to be consistent. Decide whether to contribute weekly, bi-weekly, monthly, etc. Children’s minds are very sharp. Tell them what each coin is when they contribute to their bank. Let them know what a penny, nickel, quarter, and dollar is. This is a time where counting can become a great tool for teaching.
When your child makes a purchase at the store possibly give them the exact amount of the purchase. When the cashier tells you the amount due, your child can observe the process.
Most dollar stores have posters that show the different denominations of money. This is a great visual teaching aide to teach your children about money.
Allow your child to go to the bank with you. Open a savings account for your child and allow your child to see the deposit process. In this way your child will learn and understand the importance of saving.
7. Good Example
Be a good example for your children. This is one of the best ways of teaching your children about money. Remember they are watching what you do. They want to see if your actions are matching what you say.