subject: How To Teach Kids Money Management [print this page] For your children, one of the best things you can do for them is to properly teach them some money management skills. Especially in today's uncertain and shaky economic times, it's very important for young kids and people to understand the financial world. By honestly teaching your kids money management skills, you will undoubtedly be giving them a great gift that will last on well into their adult lives.
Give the child their own piggy bank and encourage them to save their money in it. Your goal should be to get your son or daughter excited about putting money in it. Encourage them to save up their money with the hopes of purchasing a new toy or game for themselves.
In exchange for performing necessary and small chores around your house, your older kids could be given small weekly allowances. You don't have to go overboard with it, ten or even five dollars per week will be enough to teach the kids the importance and necessity of a hard day's work. Get a chart to store in your kitchen or living room and keep track of the child's assigned chores. Each week, after they complete the chores, reward the kids with their deserved allowance.
Get a few more piggy banks or some empty condiment jars and designate them for different monetary uses. Label these containers 'Savings' and 'Spending money'. You should also designate a third one for a bigger purchase like a brand new video game or bike.
When the kids receive their weekly allowance, instruct them to divide the money up between the jars. While having spending money on hand to use for snacks and small toys will be appealing at first, but eventually the child will learn that putting their money into their savings jar is much more rewarding.
Open up a new savings account at the bank for your child after he or she has outgrown their jars and piggy banks. This will be a great way to teach them about certificates of deposits and interest rates as well. When they are older and more mature, a proper checking account will allow him or her to put their money management knowledge to the test.
It's very important to make sure that you are properly managing your own finances as well. After all, it will be a little easier for you to teach it if you are living it yourself. On the flip side, your kids will also have the benefit of learning from your own mistakes.
