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Kids need to know how money works in the world. By the time they are adults, they will need to understand how to earn money, manage money, save money, invest money, and donate money. How do you teach your children about money?
These three techniques have been successful for my family:people, money, savings, investments and children concept - smili
1. Give a weekly allowance. Have your children divide their allowance into three pools: spending, savings and donations. (To help with this, check out the “moon jars” at http://www.moonjar.com.) Let your kids spend their money as they choose. Let them make unwise purchases. Small mistakes now will help prevent expensive mistakes later. Let them choose the charities to which to donate.
How much allowance should you give? The guide I learned in a parenting class is one dollar for every year the child is old until they turn 12. At 12-years-old, the allowance is fifty cents for every year old. At this age kids can start earning their own money to supplement their allowance.
2. Require your kids to pay for the things they want. As parents, we provide what our children need. Many parents easily fall into the trap of paying for everything their children want. Doing this leads to dependency and expectations that Mom and Dad will always be shelling out the dough well into adulthood. Doing this deprives your children of learning how make and use money wisely. I have personally witnessed how motivated kids can be to earn and save money when they are paying for their own cell phones, music, movies, gifts for friends, expensive sports equipment, etc. I have personally witnessed kids researching purchases, sniffing out the best bargains, and deciding something is not worth their hard-earned money after all. Allowing your children pay for the non-necessities is not cruel; it is teaching life skills.
3. Involve your kids in large family purchases and vacation planning. This gives your children the opportunity to learn about spending limits and making choices within those limits. Let your children know the budget and involve them in evaluating the options. Listen to their input. When my family was planning a trip last year, it was my pre-teen who found us the best hotel deal. It was a great hotel, too!
April is Financial Literacy Month, a great time to start teaching kids about money. There is lots of advice available about raising financially literate children. The above three guidelines have worked for my family. For more ideas on raising financially literate children, an internet search on” financial education for children” will bring up numerous tips and resources.
What tips do you have for teaching kids about money?


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