It is never too early to teach your kids the value of financial responsibility. Your children may very well avoid financial problems later by learning to manage money early in life. There are valuable lessons that you can teach them at any age. Start early and teach often to raise a money-smart child.
Toddlers
Toddlers absorb a lot more information than adults realize. Children between the ages of one and four can learn a lot about money. Talk to them as you are buying groceries, going to the bank and writing checks. Explain what you are doing. They understand that you are exchanging money for goods like food, clothing and gasoline. Allow them to sort coins in a jar so they get used to the concept of money as a tangible object. Children at this age like to play pretend with cash registers and toy money. Encourage them to select items and "pay" you for them with play money.
School-Aged Children
By the time your child reaches school age, he is old enough for a small allowance. How much you give them doesn't make a difference at this stage. All that matters is that you are teaching them how to manage what they are given. Some parents allow children to earn an allowance by performing household chores or caring for pets.
Other parents give their kids a set amount each week. Teach your child the difference between needs and wants and allow them to experiment with buying their own items. It is crucial that children be allowed to make mistakes at this stage. If they want to blow their whole allowance on a toy, let them. They need to understand that money is not an unlimited commodity and they have to budget for the things they want and need.
Teenagers
Teens are a harder bunch to teach, but it is crucial that they learn money concepts at this stage. In addition to a weekly allowance, they may be receiving earnings from part time jobs. Teach them the time value of money by introducing them to investing. Help them to open a checking and savings account at your local bank. Allow them to save up for big ticket items like musical instruments, trips or clothing.
Teens with their own cars can pay their own auto expenses like gasoline, insurance and maintenance. Companies like 21st auto insurance provide great rates that can easily fit into your teen's budget.
College Students
Although college students are adults, they still need guidance when it comes to managing money. Teach them of the financial dangers of credit cards. Encourage them to find ways to pay for college without getting into debt. Guide them into adulthood with valuable lessons on money that will carry them through life.
Teaching your kids about financial responsibility is vital at every stage. It is never too early to start teaching your children the value of saving, investing and spending wisely. By incorporating these lessons into their daily lives, they will be well-equipped to make responsible financial decisions through adulthood.
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