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by sitecore\rmcgruder on July 13, 2010

We’ve all heard the quote from Benjamin Franklin, “a penny saved is a penny earned.” This expression is even truer in today’s volatile economy. Wise financial planning encourages wise spending and saving for the future. Learning smart spending habits can have a profound impact on a young child’s life. The financial lessons children learn today will last well into adulthood.

According to a recent survey by T. Rowe Price, a global investment organization, 48 percent of parents indicated that they are having more discussions with their children about money, saving, and spending than in years’ past. There are many simple ways to incorporate financial lessons into your child’s everyday life. The financial experts at Money Management International offer the following tips in raising financially smart kids.

Turn grocery shopping into a teachable moment. This is a great opportunity to teach kids about comparison shopping. Teach children how to shop by value rather than brand.

Remember to always shop with a list. Shopping with a list helps children understand how prior preparation can lead to great savings in the end.

Give children an allowance. There are differing opinions on whether or not to give children an allowance. While some may consider it “spoiling” kids, giving children a regular “income” can be a great opportunity to teach them the basics of earning, spending, and saving. Parents can also use an allowance to help children learn the difference between wants and needs.

Help your child open a small business. During the warm summer months, lemonade stands are common in many neighborhoods. This is a great way for young entrepreneurs to learn financial skills. The adventure of starting a small business is a great financial and confidence-building lesson for kids. Children learn how to set and achieve goals, understand profit and price, and further develop basic math skills.

Open a checking/savings account for your child. Many banks and credit unions offer parents the opportunity to open an account in their child’s name. Owning and maintaining an account helps children learn important life skills. There are many ways to teach children about money.

The most important thing parents can do is to communicate with their children about managing money and budgeting. Parents should offer several examples of how money is earned and give children an opportunity to help decide how it is spent. And, most importantly parents need to educate children about the dangers of overspending, borrowing too much, and paying high interest.

 

Are your kids spending machines?

Posted in:  Kids & Money, Family, Education

Comment(s)

Darren says:
July 25, 2010
Website: www.teaching-kids-about-money.com/allowances

I think definitely a great learning tool is giving your child an allowance. This will enable them to learn how to budget and save at the same time. Have a weekly or fortnightly meeting with your child and plan on what can be saved and what can be spent. This tool will have an everlasting impacting on their lives right into the adulthood. One thing to never do is to take away their allowance if they have behaved badly. What you want to do is teach them that mums and dads usually get paid every week (or whatever cycle your payment is) and that is replicated to their child so they can experience this as well. If they had one bad week, does that mean the parents don't get paid? Of course not! Teaching kids about money should also be fun so your child is interested in how to save for their future.



Haley at FamZoo says:
July 14, 2010
Website: www.famzoo.com

These are all great suggestions for teaching children about money. If you do decide to give an allowance, which helps teach children essential budgeting and saving skills, check out www.famzoo.com to open a virtual bank for your family. You can automatically deposit allowance into your child's account, and they can log on to check their balance and separate their money into spending, savings, and charitable giving accounts.



The Money Academy says:
July 17, 2010

Kids get their fundamental understanding of how money works when they are young and they first "notice" money. Currently, most of what they think, know and feel, is learned from the culture and their environment. With this culture of consumption, there is little incentive to understand money as a tool that can be used to create a live of financial independence. Beginning when kids are very young, it's important to expose them to the many uses of money and the choices they have. A great way to do this is through play. "Blast The Money Trap" is a great family game and everyone will learn together the value of using money to get out of the Money Trap!



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