Teaching Kids About Money – How to Instruct Your Children About Finances and the Value of MoneyTeaching kids about money is absolutely a necessity for any responsible parent. Several polls indicate that between 60-80% of adults were not taught about the wise handling of money by their parents. Even sadder, many children have been taught nothing. If the answer to these questions is “no”, do not feel that you have failed. It’s never to late to start teaching your children about money and financial matters. The most important lesson you can teach them is being financially wise yourself. Make no mistake, if your daughter sees mom spending a thousand dollars on a credit card at the mall, she will want to do the same thing. Set a good example for your children.
First, help them understand where money comes from. There is no “free ride.” Sit your older children down with you while you are making a budget. Explain how you get a paycheck each week, and what bills it goes to. A huge part of this understanding and teaching kids about money is letting your children work for what they want. Obviously, a parent’s job is to supply for all your children’s needs. However, if your ten-year-old simply HAS to have the latest video game system, and it’s not in your budget, set up a plan for him/her to earn it. This could include saving his allowance, extra chores, or selling lemonade at a yard sale. One thing I can guarantee, because I’ve seen it with my son, kids value things they work for WAY more than things they don’t. Teaching kids about money involves instructing your child about saving, spending, and giving. When your son or daughter receives money or earns it, have him/her put a percentage into savings (particularly savings for college, give some to a church or charity of your family’s choosing, and put some aside for spending. This lesson carries over into real life, and your children will remember as adults to set aside money to save, and to give to others who are less fortunate. Learning early about credit is one of the most important lessons you can teach a preteen or teenager. Talk about the consequences of getting into too much debt. Teach your childabout taking out loans and mortgages, and explain the value of a credit report. Here are a couple of suggested fun tools to help your family begin teaching kids about money and saving. The Melissa and Doug Play Money Set  is a wonderful tool for younger children to teach them about what each coin is worth, saving, and spending. Comes with lots of pretend bills and coins.The Learning Resources Pretend & Play Checkbook Learn How to Save Money for College with Upromise.com
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