We take it for granted that children know how money gets into our wallets. The tips below will guide you through teaching your children
value of money. Now I'm not referring to value of stocks and bonds, compounding interest, or current market value of a U.S. dollar.
What every child should be taught at some time, is: purpose of jobs (how we earn money), saving for goals (how to save money), limit needless spending (how to budget).
It's up to you to decide when and at what age it is appropriate to discuss following topics. But keep in mind that if you don't teach them skills to make educated, responsible decisions with their money, you will be holding back a valuable lesson that should be taught. Learning how to successfully manage money is a skill they will have for life.
Where To Start
Don't assume your children know meaning or purpose of a job, bills, banks, etc...
Let them see you pay your bills. Explain to them how you have 'X' amount of dollars per month to pay for everything. Point out dangers of getting into debt (credit cards). Explain that ATM machines are not magic money dispensers that give you as much money as you need, for free.
Learning comes from experience. Just talking about money will not get job done. Learning how to earn, save and spend money appropriately comes from real life experiences.
If your children do not have an allowance already, think about starting one. Only when they have their OWN money to manage, can they put your lessons into practice.
When you are discussing allowance with your children, relate it to your own life. Explain to them that when you want to buy something, you must first work to earn money, then save enough money in order to purchase it ie: car, house, clothes. Tell them that if you don't go to work and earn money, there's no way you can afford to buy what you want.
You can then explain to your children that if they want to buy a new toy, they must earn money in order to buy it.
It's Up To You
You can design your childs' allowance and chores however you see fit: weekly, bi- weekly, monthly, pay-per-chore.
One method that's effective is designating 'X' number of chores, for 'X' number of dollars per week.
For example: "Johnny. You will earn $5 a week if you do these jobs/chores: water lawn (twice), take out garbage, vacuum house (twice), and feed cat everyday."
It's up to you to develop a list of chores that can be done around house, and an appropriate allowance amount to go with it. In other words, you shouldn't have your child painting whole house for a quarter.
