Children should be taught early to know how important money is in their everyday lives. By the age of four, they should begin to know how to count and the values of coins and paper money. Within a year, they should understand how money is used to buy things.
At about that time, they should also know that there are advantages to save money for their future use. If taught right and frequently emphasized, this knowledge should stay with them throughout their lives. Some suggestions on ways to teach children to save money may of help to parents.
1. No allowance: That old-fashioned system creates an entitlement attitude in children, and no matter how they behave, they’ll believe they should receive allowances. There are many much better ways to give children money. In later life, they’ll need to earn money, so that requirement should start at home as early as possible.
2. Pay for jobs well done: Set up a scale to pay specific amounts for cleaning their rooms, help with laundry, dishwashing, sweeping and lawncare. This financial reward system could include good grades at school, personal cleanliness, petcare and a score of other chores.
3. Start individual bank accounts: This will teach children about savings deposits, checking accounts, interest and withdrawals, as well as a growing awareness of the value of the economic system. As children grow more familiar with personal banking, introduce them to doing their financial transactions by computer.
4. Encourage savings for the future: An efficient savings plan should have an ultimate goal. Grown-ups save for a future vacation, new house or car. Children can learn the value of savings by putting money aside in their bank account for future rewards, including toys, games, CDs and DVDs.
5. Children learn by example: If you are serious about saving, you’ll serve as a good example for them. Discuss your practice of banking money on a regular basis, and how quickly the balance increases.
5. Take your children shopping with you: When they’re four years old, they can learn how you decide to buy the best foods, clothing and other family necessities at the best prices. Let them understand why you make and keep budgets.
6. Work outside the home: When children are ten, they can learn more of the value of savings by getting part-time jobs. This will be their first experience in real-world work, and it can be vital in establishing independent bank accounts and controlling their own money.
7. Continue teaching: When your children reach their teens, let them offer suggestions on making major purchase decisions, including clothing and furniture, cars. If you’re considering moving to a new house, the teens should be in on the plans.
Teaching children to save money is a necessity in today’s free society. The lessons they learn will be vital to their ability to succeed as adults.