6 Steps to Help Your Child Learn About Money

(This is a guest article by Andrew Salmon*)

Your child is going to have a love/hate relationship with money as they grow to adulthood.

If you’d like to push that relationship to be more about the former than the latter, here are six steps for teaching your child about money:

6. Good Morning, Early Birds

The best way to provide your child with a solid understanding of money and what to do with it, it’s best if you begin early before any bad habits can creep in while your back is turned. From as early as age 3, you can begin teaching your kids about handling money.

5. Make Allowances

There’s no better way to teach a child something than with hands on experience. Providing your child with a weekly allowance gives them spending power. Let them pick out items they want and pay for them with their own money. Have them work around the house to earn the stipend. Pick their birthday as a point for an annual raise.

4. Work It Out

Working around the house is one thing, working a “real” job is something else and the sooner your child gets this experience the better. Encourage them to get a part-time job in their mid-teens so they can learn what working is all about. They’re going to spend decades doing this, so they might as well learn it early while they have a chance to make money blunders that don’t result in catastrophe.

3. Practice What You Preach

Kids learn by example and your child is no exception. They are sponges and absorb whatever they are exposed to. So, instilling good money handling habits begins with the face in your mirror. Practice what you preach. Don’t stress saving and budgeting while displaying some extravagant purchase to the entire household. This will undermine the lessons you are trying to impart. Stick to you own budget, pay your bills on time. Economics Class is always in session.

2. Hold Your Hand Out

Take your child along with you when you stop off at Good Will or the Salvation Army to drop of your unwanted clothes, toys or gadgets. Stress how important this action is for people who can’t buy these things for themselves. Not only will they learn the importance of giving, but explaining the plight of the poor and needy will give your child a solid understanding that no one wants to be poor, that it is a state to be avoided and that through good money management, they can avoid poverty.

1. The Future Is Now

Money tends to burn holes in the Kids’ pockets. But one can at least make an attempt to teach one’s child to squirrel away into a savings account some small portion of their income whether it be from an allowance or a first job. Not only does this exercise stress how important it is to save, but it can also provide them with a nice start up nest egg for when they fly the coop.

*About the author: This is a guest post contributed by Debt Management. It was written by Vancouver based author and freelance writer Andrew Salmon.

*Image Credit: Photograph by kellyv [via Flickr Creative Commons]

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Christina said...

I can really make use of this, I have a 2 year old kid turning 3. At her early age I teach her to save in her piggy bank .. in later years I can adapt your advice..

Stephan said...

love the tips here. I am a recent graduate and can honestly say my parents raised me so that I would know how to deal with money. They never just handed me money and made me realize early on that money does not grow on trees. They did limit me to only summer jobs in high school as school stressed as being the most important thing. I cant disagree with this point looking back, but it is obvisouly important that kids learn what it takes to make money BEFORE they enter the real world and get shocked after 4 years of college.
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Parag said...

Excellent post. Parents job is to inculcate ways to save money and your article will certainly make it a little easier. And yes I quite liked the idea of making children work in house to earn some pennies.
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