How much does your child really know about money? Do they think money something you work hard to earn, or does it magically appear out of the ATM?
For kids, sooner is better than later, when it comes to learning the real value of money. This is especially true in today’s reality TV culture with celebrities throwing money everywhere. Here are a few hints to get your started.
Paying the bills. Explain to your child that you have a set amount of money each month that is used to pay bills. If you spend all your money on bills, you won’t have money for things like movies or other treats. Explain that money is earned through work—and then saved—before things can be bought.
The hands-on approach. There’s no substitute for hands-on training. Your child is likely to learn more if you open a savings account in their name. They’ll be able to see the money that’s going into the account, as well as the interest they’re earning. Review their statement so they can see their account grow.
Setting priorities. Most kids want to spend money as soon as they get it. This is perfectly normal, but it’s also a great opportunity for a lesson in setting priorities. Have them make a list of all the things they want. It’s likely they won’t have enough money for everything on their list, so have them number in order of importance. This should be their decision. If they make the wrong choice and decide later that they should have bought something else, they’ll learn an important lesson in decision-making.