Check out five straightforward solutions to teach your kids about money, and educating them on making smart choices with it.
1. Involve them in the budget
Yes, budgeting is boring, and I don’t think I know any child that jumps at the opportunity to work with a spreadsheet. Involving a child in a budget does not mean that they have to sit down for hours on end accounting for expenses and income–abacus not included. Once your budget is done, call the kids over and show them where the money goes. When they see a zero balance at the bottom after all allocations, you will find that they start asking for a lot less stuff, and stop complaining about what they don’t have. Knowledge is power. I began this exercise with my youngest daughter at age 8. She was able to understand and embrace the concept of a budget and money at a young age using this method. Trust me, this works.
2. Have them manage an account…even if it’s just pretend
Some parents believe in an allowance. I am not one of those parents. If you need money from me, you are going to have to earn it and manage it. Since I have twin 16-year-olds, I opened personal checking accounts in their names. We work once a week on managing those accounts and they now have a much better concept of money than most other girls we know. In fact, they have learned how to log on to online banking, use bill payment and budget on their own.
With my youngest, she has a “pretend” check register that we assess each week. She is allocated funds for successful completion of her chores (but if she does half a job, she earns half the pay…it’s life). Each time she asks for something, we deduct that amount from her checkbook. When she has no money left, she is blissfully quiet at the grocery store checkout…and almost everywhere else. If it isn’t in the budget, it isn’t happening.
3. Involve them in bill paying
Like budgeting, no kid wants to sit down with mom and pay bills. I get that. Truth be told, I’d rather run my eyeball through a cheese grater and use lemon juice for eye drops than pay bills. Yet, I have to pay bills; so will they. There is no more convenient time for preparation than the present. I focus more with the twins on this activity seeing as they are getting ready to launch into the world. Twice a week, we have a standing 20-minute date for bill paying.
4. Create financial goals together
I have found that when we establish goals together, we keep them as a family. For instance, we write down vacations, trips and other frivolities that we decide to save up for. We consider one another accountable with the savings for these items when we budget and bill pay. The allocation for savings is part of our budget. We treat it like a bill. This is a powerful way to teach kids about money and goal setting, while keeping them realistic about where money really does come from and where it goes.
5. Rinse and repeat….often
As with anything else, consistency is key. You have to make a point, make a date, and make an effort at least once a week, and stick with it. The results will pay off—pun intended.
Source: Yahoo Shine