Teach Kids Money Management Skills
One of the most important lessons in life is money management
. If you do not teach your kids money management, it is not likely that anyone else will. If the children learn to manage their money, they will be able to live well, no matter what their income. These skills can help through college as well as through life.One popular method to teach children money management uses containers to divide their income. Every time the child gets some money, it is divided into the containers which are labeled taxes, giving, savings and spending. Ten cents of each dollar goes to taxes and another ten cents goes to charity. The remaining eight cents is divided at an agreed upon ratio into spending and savings.
Money that is placed in the taxes container is combined with family savings for a special occasion such as a vacation or other reward. While the child may have some say in how the money is spent, just like real tax money, he does not get to make the decision alone. The child needs to learn that taxes benefit everyone.
Money placed in the giving jar can be given to a charitable purpose. Perhaps your child will use this money to help other children who are less fortunate. It could be used as a gift to your church or place of worship. Giving promotes gratitude in a child and lets them know that there are things event they can do to help other people.
Money in the savings jar can only be used for larger purchases. It should not be dipped into just because the spending money is gone. Remember your purpose is to teach money management skills. Consider opening a savings account for the child and making a regular trip to the bank for deposits of the savings jar. A few cents here and there can add up to a large amount of money.
Money that does not go into the other three containers is the child's spending money. Using this method is a great way to teach the child to live within their means and to avoid over extending their credit. Skills learned at this time are beneficial for the whole life.
Kids money management skills can teach young adults how to manage their money. Your child may not initially like the system, but as they grow into adulthood will appreciate the time that you took in training them about the proper use of money.
kids money management
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