Parents argue that why do the children need money when they are willing to buy everything for thier children. In contrast, children think having money is cool and they can buy whatever they want. Well, it all depends on the family circumstances on how early one can teach their children about money. Experts suggest the sooner one introduces money to a child, the better the child gets at finances when they grow older.
The age old piggy bank system does not seem to working in the modern days. All children are looking out for immediate gratification and instant rewards. Why the kids are fascinated about money? It may be the fascination towards the power of money to buy anything or the mess adults make around finances or savings. Parents may wonder why children need to get money when they are struggling very hard to earn it.
Children see a toy as a need while parents might think, it is a waste. 🙂 Teaching money to children is as important to teach any other basic life skills. Initially, counting the coins and identifying and grouping them might be a good idea to start with. Handling small amounts of money to save in the piggy bank or purse helps them understand the importance of saving.
Being money smart can be taught to children by actually handling them some money, say, ten dollars. Allowing them to spend and observing how they take care of the cash will help parents in giving feedback. As it is a small amount, some mistakes may be permitted to facilitate their learning. By learning their spending patterns or saving habits, parents can help the children improve their money skills.
Handling money for children in turn for small chores around the house is a traditional and good idea. Depending on their age children can be appreciated and rewarded for minor chores such as putting the toys away, sorting laundry, throwing waste, unpacking groceries, keeping their room clean and so on. Older children may be allotted additional tasks such as vacuum cleaning, lawn mowing, snow blowing, raking leaves, baby sitting, and so on.
The minimum age at which children can start earning is 14 and it may vary by state. While handling money in return for chores, parents must always emphasize that education is the top priority for children and that earning comes only at a later stage in life.
Spending and Saving
Spending the money appropriately and identifying the change is a good skill for children. Basic math skills can be put to use while children learn money management. Children can be supervised while performing small transactions such as ordering their food, buying their favorite toys, choosing their video games, and so on. Calculating and handling change is also a good skill to be taught to children.
Letting the children save their money (which is hard :)) in a piggy bank or a bank account for future use is a good idea. Keeping track of the money initially through a small note book is suggested so that every body has a track of the money. Accounting and budgeting can also be introduced to children apart from buying and saving.
While financial management is the constant learning for most adults, it is also crucial for children. Children learn by observing parents and might want to exercise their own money management techniques. Sometimes parents may be surprised to hear the ideas from children that they could never think of. 🙂