Children and Money Management – 5 Lessons Parents Should Teach Their Children About Money
Children need to learn money management from their parents. Parents must educate their children to make the right basic financial decisions in their lives now which will mold their future spending habits. These are five lessons for parents to teach their children about money.
Lesson 1: Today there is always a new game or cell phone coming out on the market. The cost of acquiring these can be quite high, not to mention the services that can be involved. Children need to learn the difference between what they want and what they really want or need. Sometimes waiting a little while before a purchase allows them time to decide if they really do care to have it.
Lesson 2: Earning money is self-empowerment. It gives a sense of self-worth. A set allowance for a list of completed chores is quite sufficient in showing how money is earned. Children love having their own money and they will learn money does not magically appear from an ATM machine.
Lesson 3: Saving money in that piggy bank is a great idea. Saving some of that allowance money is beneficial in teaching children to save for a higher cost item instead of expecting mom or dad to get it. Remember the rainy day theory? If parents can demonstrate saving money themselves children can see this firsthand.
Lesson 4: Parents can encourage children to think of the whole family as one entity and not just themselves and their own individual wants and needs. Introduce them to the communities' Shelters and food kitchens to learn there are more needs in the world than their wants in life. Removing selfishness can put more emphasis on needs rather than wants.
Lesson 5: Shopping trips for children that can understand can teach what must be purchased with a certain amount of money and how to make that money stretch as far as possible. They could even appreciate the use of coupons and comparison shopping. Children can learn decisions parents must make everyday to make sure the family has what it needs. Children spending their own money can learn to budget it and deal with their spending decisions.
A parent is a child's greatest teacher. Money does play a role in our lives being easier or harder. Now is the time to teach your children how to spend money wisely. Parents can make their children's lives better by helping them to avoid bad money management as adults.