5 Money Management Lessons For Kids

It is never too early to start learning about money management, teaching your children about money management can help the grow up to become fiscally responsible adults. Described here are five basic lessons that can help teach children about money and money management.

Lesson 1: Delayed Gratification

If you can refrain from purchasing things for your children immediately, simply because they want them, you have an opportunity to teach them about value and delayed gratification. When you child asks for something, give them a project or chore that they must perform before you will purchase it for them. Making them wait and work to earn the object of their desire while teach them a valuable life lesson.

Lesson 2: Set a Strict Allowance

Giving your children an allowance every week or month is wonderful. Give some allowance without the child having to work for it, but it is imperitive to impress upon them that it must last them the entire period and that no more will be coming until the week or month is up, without additional work. If they require additional funds, make them do chores, like dishes or laundry or yard work so they can earn more money. This will help reinforce lesson 1, teach them to keep to a budget and to work harder to get what they want.

Lesson 3: Teach Them About Budgeting

Teach your child what a budget is, how to determine how much they can spend each day to make their allowance last. For children this can be easiest if the money is physically divided up in containers or in some other fashion. You may also want to have them take some portion and put it aside as savings, that they do not spend as part of their budget. You can also remind them that their spending or savings can be increased by doing additional work throughout the period of their allowance.

Lesson 4: Have Your Child Set Goals For Themselves

The sometimes expensive toys and clothing that children desire can present a wonderful opportunity to teach them about setting and achieving financial goals. Instead of buying a toy or item of clothing that you child wants, have them save up for it by setting aside more of their allowance and earnings each period until they have saved up enough money to make the purchase themselves.

Lesson 5: Get Them a Savings or Money Market Account

Another good way to teach your children money management is to teach them how to use their money, to make more money. Take your child to open a savings or money market account and show them how the money they deposit is earning interest and tell them how investing their money in savings, stocks and bonds can help them make their money work for them and help them meet financial goals in the future.

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