Children are never too young to be financially responsible. From managing their allowance more wisely to saving up for that big-ticket toy or game on their wish list, use the suggestions below to share valuable money lessons with your kids.
1. Teach them to budget
An allowance can be a great first step in showing your kids how to manage money. You might give money every week to the youngest children, at two-week intervals for preteens and monthly for teenagers. Gradually spreading out the timing will help your children understand the need to manage their spending.
2. Show them the value of saving
It’s only natural for money to burn a hole in the pockets of the youngest kids. But it’s important for them to discover the benefits of delayed gratification. If there’s a toy or a game they have their eyes on, suggest they forgo spending their allowance on ice cream or another immediate pleasure and instead save for a few weeks to make the bigger purchase.
3. Let them earn a little extra
You probably expect your kids to clean their room, help with the dishes and do other daily chores. But consider offering them the chance to make extra money by helping you organize the garage, washing the windows or taking on another job that goes beyond the routine. Getting paid for extra work will help instill good habits and give children more control over saving and spending.
4. Introduce philanthropy
Even when your kids are very young, you can speak with them about your charitable gifts. Talk to them about organizations they might like to support, then earmark part of their allowance for donations to those causes.
5. Create learning opportunities
If your children spend their entire allowance right away, resist requests for more money before their next allowance is due. Negative consequences can carry powerful lessons. If you talk with your kids about how to do better the next time around, they’ll start making smarter choices.
Source: Merill Edge