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Mother's Day Tips for Teaching Your Kids About Money

Carrie Schwab-Pomerantz on

Dear Readers: Moms these days can fill a lot of roles -- from nutritionist to chauffeur to nurse to counselor. We're called on to be experts in everything from caring for physical wounds to healing broken hearts. On top of that, many of us hold down full-time jobs! Now I'm going to add one more responsibility to the list: financial coach.

Think you don't have time to add one more thing to your busy schedule? Actually, you might be surprised at how much financial knowledge you already impart to your kids just in the everyday things you do. After all, kids are always watching and learning from us -- even when we're unaware of it. So my thought is that when it comes to money, a little conscious awareness on the parts of moms -- and dads -- can make the financial lessons we teach our kids that much more effective.

Still skeptical? Here are some practical ways you can increase your kids' financial knowledge from the early years until they're ready to set off on their own.

I'm all for starting to teach kids about money at an early age. I believe even children as young as 3 to 5 can begin to learn a bit about saving and spending -- and have fun doing it. As your kids get older, you can involve them in budgeting, smart credit management, even investing. And it doesn't have to take a lot of time.

Instilling the savings habit in kids from a young age is a great start to their financial education. Add to that a beginning awareness of spending, and you'll really give them a boost. Try these simple activities to get started:

-- Have your kids choose something they really want. Put a price tag on it, and help them set aside a portion of any money they get from an allowance or gift, say 10%, toward their savings goal. That's a good start. (You can always match their savings to help them along!)

 

-- Make saving tangible for even the youngest children by decorating separate jars for each savings goal and helping them track their progress.

-- Teach the value of money by giving a young child a dollar to buy a snack, pay for it, get a receipt, keep the change and put it toward a savings goal.

By middle school, kids are ready to handle some money of their own. Whether it comes from an allowance, gifts or eventually a part-time job, it's only by managing their own money--and making their own mistakes -- that kids will learn to make good saving, spending and budgeting decisions. Here are some easy ways to give them real-world experience:

-- Help your preteen open a savings account. (You'll need their Social Security number.) Shop for one with no fees -- another good lesson. Talk about interest and explain how compound interest works. Your bank manager might be willing to help out. That might get the kids to listen more closely. Again, encourage them to save at least 10% of any money they receive.

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