Help Kids Raise Money

By MV Parents
Jan. 5, 2009

In addition to discussing financial matters with your children, it’s also important to teach them by example. Kids are very observant, and pick up on what their parents do and say, so be sure to set a good example when you’re dealing with money.

Make it a point to teach your child not only by what you say, but also by what you do.

 

Make a budget, and stick to it. If you have to cut back on some things, let your kids know that it’s because those things don’t fit in your plan for the month (or week, or year, depending on your budget).

 

Practice good spending habits, such as comparing prices before you make a significant purchase. Stop at several stores to see where you can get the best price, check out store ads in the newspaper, and use any coupons or discounts you have available.

Ask your kids to help you make the best decisions, and help them understand your spending practices.

 

Set aside money from your own earnings for savings and donation. Kids may think they should keep all of their money for themselves, and showing that you care about helping others sets a powerful example.

Decide on a percentage you will give each month to a nonprofit organization, school, or other charitable cause.

 

Don’t use your credit card to purchase things you can’t afford—this can be especially appealing (and dangerous) to teens.

Exceptions to this rule can be made in cases of emergency; if you don’t have the money for an emergency purchase, be sure to have a plan to pay off your bill in a timely manner to avoid interest charges.

 

Give your kids small loans. Although it’s helpful to teach kids that they cannot spend more than they have, it’s also helpful once in a while for your kids to borrow money from you and then pay it back on a regular basis.

For example, if your child wants to buy a bicycle, have her save up a certain amount for a deposit and then figure out a payment plan (and stick to that plan every step of the way) until it is completely paid off.

 

Encourage your kids to save both in the short term—for things like a new bike or a concert ticket—and in the long term, for expenses like college tuition or a car.

Having a savings goal makes the budgeting process more real and tangible.

 

Remember that your children learn from all members of your family. Make sure everyone is practicing good saving and spending habits to reinforce the messages you’re sending to your kids.

 

Keep your kids learning, no matter their age. Go to the Summary and Next Steps page to find relevant resources for young children, tweens, and older teenagers.

Like anything else, financial literacy is best taught by intentionally setting a good example around your children.

If your kids see you and other members of your family making well-informed, well thought-out, and responsible decisions about money throughout their childhood, they’ll be much more likely to make good decisions themselves.

Make it a point to set a good example around your kids—and don’t forget to talk to them about it to reinforce these ideas!

 

Source: MV Parents

 

Editor’s Note: we would like to know what you think. dan@youngchronicle.com