It is important that children understand the value of money, here are some simple steps to help them understand more.
1. As you child grows up and starts to learn to count, involve play money to introduce them to the concept early on.
2. Involve your children in your basic everday finances, keep them informed of how you save money and how it should be spent wisely.
3. Highlight the difference between what they actually need and what the just want. This will enable them to make better moeny decisions in the futures.
4. Teach your children the value of money, setting them achievable goals is a great way to help children learn the value of money. For example, providing extra help around the house could earn bonus pocket money, or a monetary reward for achieving good grades can help children to become more responsible for their futures.
5. Show your children the benefit of saving money, demonstrate how money grows in a bank through interest and you can reward your childrens saving habits by paying them interest at teh end of every month. Even better would be to have your child calculate the interest themselves so they know how much they have to save and how fast interest accumulates.
6. When giving your child his/her allowance, give it to them in smaller denominations i.e. 1 dollar bills instead of a 5 dollar bill, this will make it easier for them to save part of it each time.
7. Introduce your children to a Savings Bond, possibly give them as a gift and will ensure they have something that cant be spent on a whim and will provide for their college education.
8. When you open a savings account for your children, take them with you and get them involved in the process and understanding how the system works. Encourage them to pay money in regularly, but also allow them to withdraw it when they want.
9. Encourage them to keep simple records of their saving, and suggest that they save reciepts for any purchased items.
10. If you send your child to the grocery store for supplies, show them where the bargains are and teach them to be a smart spender.
11. Take your children with you when shopping and explain why you purchase one item over another one based on value, quality and etc.
12. Educate your children about advertising, remind them that things that sound to good to be true, often are exactly that.
13. Teach your children about the dangers of borrowing moeny and the interest you have to pay when you do.If you loan them money, charge them a small interest rate so they understand the concept of paying back more than they borrowed.
14. Explain to your children about credit cards, especially that how they work and that they have to be paid off each month to avoid the high interest charges.
15. Involve your children in family discussiona about houshold finances and answer any questions they have truthfully.
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