Teaching your children to manage money early in life is as important as teaching them how to tie their own shoes. If they cannot manage money, it will be hard for them to succeed in life, regardless of the occupation they may choose. Follow these helpful steps geared toward pre-school children to teach your children to manage money.
Things You’ll Need:
- chore list
- reward chart
- piggy bank
- savings account
Give chores. A child as young as two years old can learn to be responsible for a chore or two. The younger the age of the child, the more “fun” a responsibility can be. Just as you may work for a certain amount of money per hour at your job, you should pay your child a certain amount of money for each chore that is assigned.
Create rewards. On a piece of paper or poster board, create a chart listing each chore that your child is responsible for. On a daily basis, let your child put a sticker over each chore that he has completed. If a chore is only done halfway, your child should only earn half of the payment. If he has done the job exceptionally well, he should be paid a little more.
Teach money management. Teach your child how to save and how to spend. Perhaps you should have two “piggy banks”. One should be for saving and the other should be for spending. Once your child has reached a certain amount in savings, take her to the bank to open her own savings account. For spending matters, teach her to save her money until she has enough to buy something that she really wants.
Pay debt. As your child gets a little older, teach him about having debt and the importance of paying it off. If he wants to buy a certain toy or game, but doesn’t have enough spending money, let him borrow money from you with the agreement that he will pay you back. Create extra jobs around the house that your child can do in order to “pay you back”. Do not allow him to buy anything else with his spending money until his debt is paid off.
Work ethic. By giving your child chores to be responsible for, you are also teaching him work ethic. If your child does not like to take the trash out, teach him the importance of doing it anyway because of the fact that it is his responsiblity. When he has a job he will not get to pick and choose his responsibilities. Teaching children to do their job without complaining is a huge accomplishment for their future work ethic.
Once your child is around 8-14 years old you can start showing them the importance of saving 10% of their income and donating 5% to charity. This is also a good time to show them they are earning interest on their savings account, encouraging them to continue to save.
Once your child reaches 14-17 years old they are more likely to have some type of significant income. This is a great time for your child to get a part time job, mow lawn for the neighbors or babysit. This is a great time to open a checking account and teach them how to manage a bank ledger as well as how to use a debit card. <Source: eHow.com>
