Teach Kids About Money - It's Easier Than You Think

Teach kids about money management starting the day they learn to count change. When children complete chores to receive an allowance, they value their hard-earned income. Extra chores can be offered as a plan for earning additional cash. Help children develop a budget, dividing their funds between spending, savings, and charity or tithing. Give five dollars plus five one dollar bills for a ten dollar allowance to make the dividing easy.

Don't give children extra cash because they want something they don't have money for. Instead, develop a plan to save or earn extra income, or print a credit card for family use. Your kid buys the object of his desire, but has to pay the family back with regular payments from upcoming allowances. Do permit kids to make spending decisions, including some you know they'll regret. This encourages caution and teaches the dangers of impulse shopping.

Encourage saving by offering matching funds for funds deposited in a savings account. Many 401(k)s do this so this is a real world lesson that encourages delayed gratification. After saving for awhile, children can buy stocks, one stock at a time, through discount online brokerage sites. They should watch the market and the value of their stock rise and fall so they understand the risk.

Many banks allow teenagers to open checking accounts and carry their own debit card. They'll be very embarrassed if their card is declined and quickly want to manage their cash flow. Help them understand and balance their account statement.

Before teens enter the labor market, discuss the necessity of balancing work with school, home, rest and play. Explain taxes and encourage a budget so they start work with a plan to manage their new income.

When you teach kids about money they are prepared for self-sufficiency. They learn the value of money be earning their income, budgeting, and setting goals. Better they make poor financial decisions while young, than as young adults with rent and bills to pay.

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About the Author:
Derrick Janson is an expert in Teaching Kids About Money. He has taught about teach kids about money topics such as allowances, budgeting, saving money and making money for kids.

Article Originally Published On: http://www.articlesnatch.com

Tags: teaching kids about money , teach kids about money , teaching children about money , kids money

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