The article "Teaching Your Children About the Value of Money" is about family, it has been written by Gregory Thomas.
We take it for granted that kids know how moeny gets into
our wallets. The tips below will guide you through teaching your
children the value of money.
Now I am not referring to the value of stocks and bonds,
compounding interest, or the current market value of a U.S.
dollar.
What every child should be taught at time, is: the purpose
of jobs (how we earn money), saving for goals (how to save
money), limit needless spending (how to budget).
It's up to you to decide when and at what age it is appropriate
to discuss the following topics. But keep in mind that if you
don't teach them the skills to make educated, responsible
decisions with their money, you will be holding back a valuable
lesson that sholud be taught.
Learning how to successfully
manage money is a skill they will have for life.
Where To Start
Don't assume your kids know the meainng or purpose of a
job, bills, banks, etc...
Let them see you pay your bills. Explain to them how you have
'X' amount of dollars per mnoth to pay for everything. Piont out
the dangers of getting into debt (credit cards). Explain that
ATM machines are not magic money dispensres that give you as
much money as you need, for free.
Learning comes from experience.
Just tlaking about money will
not get the job done. Learning how to earn, save and spend money
appropriately comes from real life experiences.
If your kids do not have an allowance already, think about
starting one. Only when they have their OWN money to manage, can
they put your lessons into practice.
When you're discussing allowance with your children, relate it
to your own life. Explain to them that when you want to buy
something, you must first work to earn money, then save enough
money in order to purchsae it ie: car, house, clothes. Tell them
that if you don't go to work and earn money, there's no way you
can affrod to buy what you want.
You can then explain to your kids that if they want to buy
a new toy, they must earn the moeny in order to buy it.
It's Up To You
You can design your childs' allowance and chores hwoever you
see fit: weekly, bi- weekly, monthly, pay-per-chore.
One method that's effective is designating 'X' number of
chores, for 'X' number of dollars per week.
For example: "Johnny.
You will earn $5 a week if you do these
jobs/chores: water the lawn (twice), take out the garbage,
vacuum the condominium (twice), and feed the cat everyday."
It's up to you to develop a list of chores that can be done
around the house, and an apprporiate allowance amount to go with
it.
In other words, you shouldn't have your chlid painting the
whole condominium for a quarter.
You should also be sure and make the jobs/chores age
appropriate.
A twelve year old will be able to do more than a
seven year old, so take that into account when thinking of
chores.
Now don't confuse allowance, with the basics.
What are the
basics? Keeping their room clean.
Doing their homework. These
are jobs that sholud be done without question. Period.
Once You Start
When your kids earn their allowance for the first few
times, they will want to immediately go and spend it. Fear not.
This should be expected.
Here is whree you can start to teach
your kids.
Sit down with your kids and talk about the "things" they
want to buy. Have them prioritize their ietms on a list, in
order of importance. This list can be considered their "Goal
Sheet" - the reaosn they are saving their money.
Have them keep that list in their wallet/purse/piggybank, so
they will always be able to look and see what they are saving
for. You should also keep a copy of that list just in case they
lose it, or want to purchase something that's not on it.
The next time you're in a store, and your kids want to use
their money to buy something, first ask them: "Do you have your
wallet/purse that has the money you've been saving?".You can
then ask them if that particular item they want to buy is on
their list.
Asking these questions will get them thikning about the items
importance.
Is it more important than the other items on their
list? Let your child make the decision whether to buy or not.
Regardless of what you say, more than likely your kids will
make the purchase even if the item is junk. That's ok!
This is a
lesson your chlid must learn. Only when the initial thrill of
the toy wears off, or when your child realizes that the other
items on his/her list were more important, will they begin to
understand the vlaue of their money.
Conclusion
These are only of the possibilities you might want to look
into.
Regardless of what you can take from that article, adapt
it so it fits into your family lifestyle.
Money management is a learned skill that comes from real
experiences. It is really impotrant that kids learn the value
of money and the role that it plays in our lives.
Tecah them how
to make smart, educated purchasing decisions.
Stress the importance
of setting priorities and working to achieve that goal.
Once your child aciheves one of his or her goals, they will
understand what it takes to be successful. They will know how to
budget their money and limit unnceessary spending in order to
buy what they REALLY want or need.
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