Money Management Skills for Kids

All over America, many people are sinking into debt. Whether it’s mortgage, credit card or loan payment it’s a tough world. So it is advisable to start teaching kids at a relatively young age what it means to manage money. A lot of parents make the mistake of handing money over to their kids just so that they don’t have to worry that money is short. The wrong impression this gives is that mom and dad are well to do and money is plenty when perhaps you gave them the money which should have been saved for the next pile of bills. Kids won’t find it too difficult to understand if you present it to them the right way. Let’s teach these money management skills for kids.

You can begin to teach your kids about money right at the time they are still in their preschool years. Let them associate that work means getting money. So each time they do a certain household task assigned to them, you give them a quarter. They begin to realize – I do the work – I have a quarter. Then teach them about saving and have them put their quarters in a piggy bank. Each day, they will see how their money grows. Then once a month allow your child to take the money they’ve saved and buy something they want. This way they see the connection between working, making money, saving and being able to purchase things.

Once your kids begin school, you can increase the amount of chores they do and increase the amount of money you give them. At this stage you can prepare a chart which will show your kids what chores are to be done and what money they can make. After a week, show them how the money totals up. Then show them how to divide up the money they have earned and put some away for a rainy day. From the age of 10, a child can begin to realize what long-term goals mean. He or she continues with their given chores and earns money. Only at this point, have them start putting money away for some specific long-term goal. Help them decide what they may want money for say three to six months down the line and let them see as each week goes by how the money is adding up. When your child has reached their teens and is going to high school this is the time to encourage them to get a job. It can be any kind of part-time job such as babysitting or mowing lawns. Have them continue to earn and save. Of course now they can be given more freedom on the spending part as there are so many more needs for a teenager. Since by this time almost every teenager has their own cell phone have them pay their own bills.

So in this modern world it’s advisable to teach money management skills to kids so that they grow up with a sense of what money is, how to earn it, and how to save it.

 

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