Raising a “Money Smart” Kid
Experts say it's never too early to start talking to your children about money. These days, with online resources, social media, and influences all around, kids need to be savvy about money at a very early age. Money Smart week kicks off on April 21st and is designed to help people learn how to better organize their finances. However, it doesn’t have to be focused on adults. Children these days are earning allowances earlier and starting to babysit younger. Teaching them how to manage their earnings now will help them in the long run. SafetyWeb offers five great tips for helping to ensure a money-smart child at home.
1. Purchase a piggy bank. It may sound simple, but a traditional personal bank for a child's room is a good tool to help them learn to save. You can also go so far as to open a savings account in their names, but sometimes for younger children, seeing their money in their own presence is easier to understand. One expert at bankrate.com suggests giving three separate piggy banks for each child and labeling them “give,” “save,” and “spend” and when they have money to put in there, have them divide it between the three and learn the importance of each.
2. Help them understand a budget. How much can you afford to spend? How much do items cost? The best way to get children to understand is to show them. Share with them your family budget, or at least the idea of money coming in versus money going out each month and how adults divide it all. You can do even do this using Monopoly money, other fun games, or through online programs.
3. Take your kids to the grocery store and teach them about the value of a dollar. Show them how to spend smart by using coupons, shopping sales and how they can save. Show them how to check for the value, quality and other concerns you might have when picking out items at the store. This will teach them to appreciate how much they are spending each time they open up their wallets. For older children and teenagers, show them about comparison shopping on the internet.
4. When you eat out at a restaurant or go to a major store and use a credit card, talk to your child about HOW credit works. Explain the difference between charging items versus paying for them right away, about paying for the bill when it comes once a month and other information associated with having credit. It’s also smart to speak to them about the dangers of identity theft and to encourage them to pay very close attention to their credit information at all times.
5. Remember, your child's money belongs to your child. Be supportive with advice, but allow your children to make their own money decisions. Let them deal with the consequences or reap the rewards!
Good habits take time. The sooner children are taught the correlation between what money buys and its real source, the more likely they will grow into financially responsible adults.
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