3 Simple Ways to Teach Financial Responsibility to Your Kids
Knowing how to maintain and monitor one's finances is an important life asset to have - after all, without a proper eye for the value of a dollar, one can easily get into debt and struggle making ends meet and providing for the family. You don't want this person to be your child. While you may be a penny-wise person yourself, that doesn't necessarily mean that your child will naturally inherit these traits via genetics. You need to make sure that you start teaching your child money management skills as early as possible so he or she can develop the skills that can help them progress later in life. That said, below are 3 simple ways to kick-start your mission.
1. Give a Set Allowance Early On
Even if your child is just a toddler, go ahead and give your child a "modest" allowance—maybe something has small as $5. Distribute it in singles and even some coins so your child can get familiar with the value and touch and feel of each. Whether you issue a monthly or weekly allowance is up to you, but allow your child to use this money to buy little odds and ends like pencils, erasers, and other small toys and candies. Whatever you do, just don't "give in" to all of your child's demands. If he or she wants something that isn't a "necessity," direct your child to what's left of his or her allowance. Take this time to also set up a piggy bank so that your child can learn the value of saving as well. Naturally, as your child gets older, the allowance amount can increase. And if your child wants more expensive things like extra cell phone minutes or iTunes, direct to the allowance.
2. Masque Money Management Lessons Through Games
One of the more inconspicuous ways to teach your child about money management is to simply let them have fun with various games like Pay Day and Monopoly. By providing fake money and different worst-case money scenarios, these age-appropriate games require players to distinguish between wants and needs as well as the importance of paying bills and being employed in order to win the game.
3. Make Them Work For "Extras"
At some point, your child is going to have to learn that he or she is going to have to earn their income. If you already require your child to do chores in order to earn his or her allowance, great. But if your child complains that he or she needs more money (which will commonly occur in the teenage years), send them on their way to find a job. If they're too young to have an actual job, that doesn’t mean they can't turn into little entrepreneurs and make money other ways, such as babysitting, pet sitting, mowing lawns or hand-washing cars in the neighborhood. Learning how hard it is to make money will make them appreciate the money they earn as well as yours.
This guest post is contributed by Katheryn Rivas, who writes for online universities blog. She welcomes your comments at her email: firstname.lastname@example.org.