Teaching Your Children to Manage Money
Many parents understand that raising children means preparing their lunches for school, helping them with their homework and driving them to soccer practice. However, some parents may not realize that one of their most important jobs is to teach their children about the basics of money management.
Don’t know where to start? You’re not alone. That’s why we’ve compiled the following tips to help you teach your children how to save, invest and handle money responsibly.
- An allowance can be a helpful teaching tool and experts say it should not be linked to household chores, in which all family members should participate. Instead, use it to make kids responsible for purchases such as toys, movies and school lunches.
- Many adults haven't mastered the art of saving to achieve their goals, but that's no reason why their kids shouldn't. Start around the age of six or seven by giving them three glass jars or piggybanks–one for spending, one for short-term savings and one for long-term savings.
- Open a savings account in your child's name and explain why it's important to put money away every month – the money works for you, it alleviates the temptation of spending it, great for long-term goals and a safety net.
- Lead by example. Whether you're an impulsive shopper or a careful spender, chances are your children will be too.
- Discuss major household purchases with your kids and why you opted to buy one product over another. Ask them for their opinion based on comparison shopping.
- Encourage your children to turn their interests into money-earning activities such as babysitting, newspaper delivery, shoveling snow, yard work, simple household tasks and dog walking.
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