Teaching Children the Value of Money
Proving to children that money is not readily available from mom and dad’s pocket can be quite a challenging adventure. With the age steadily dropping for kids with cell phones, iPod and other electronic toys that cost a lot of family income, the age in which parents teach their kids the value of a dollar has decreased as well.
How to do it? The typical “money doesn’t grow on trees” line is time honored, but not very productive. Use these tips when trying to teach your children the value of money and of the family income and family budget:
- Earlier is Better – Teaching children about the value of money has short-term and long-term applications to it. In the short term, children can start developing savings habits, learn how to shop smartly and begin to understand the general idea of investing. Long term advantages include helping your children avoid debt and planning for a healthy financial future.
- Learning Money Origins – Explaining to your children that money comes from working might be difficult for them to understand at first. This is where the original idea of an allowance came from. Telling them they can only spend what they’ve earned and then showing them that through an allowance can really drive the point home about where money comes from.
- Allowances – There has always been debate on whether an allowance should be in exchange for chores around the house. Some experts argue children will learn more about personal responsibility if they are not paid to do chores around the house. Others feel it teaches them valuable lessons about working and earning. A good balance would be to give them allowance on the non-everyday chores they do, like helping you weed the garden or wash the car.
- Savings – Explaining that they need to save their money and not get every Barbie they see might not quite be understood the first…second… third… or fourth time you say it. But incorporating a piggy bank and telling them they should save pennies, nickels and dimes starts the savings process. Giving them the opportunity to decorate the jar adds a fun aspect to the saving. Tell them to think of a goal they are saving their money for and include a visual chart of their savings and how close they are to the goal.
