Teaching Children Financial Responsibility

  If you're a parent like I am and have children that are now receiving an allowance,you know that it is now time to teach our children about saving.  I know all of this starts before they get the allowance. Like most children they don't understand staying in a budget until they get a budget called an allowance. So, how does a parent go about teaching a child about finances.

Set a Budget

Let your child know that the money they receive either from an allowance, birthday money, Christmas money, etc is theirs to spend, but that is their budget and they have to stay in it. This gives them the opportunity to make wise decisions on how they circulate their money. If they go over their budget they have to decide out of the products they choose to purchase which is more important to them.

Saving

Let them know that it's okay to save their money. Maybe they have a video game they want or an article of clothing that's catching their eye. They can learn to either save all there money and not touch it or just a certain amount and then save the remainder.  Any loose change around the house they can save in a jar, and when it's full take to a coin star machine.

If you have younger children between the ages of 2-5 years this is a excellent time to teach them to count by using money.

This is our next generation and we should want them to know how to invest better, how and what to circulate the money on.  Not to just purely be consumers.

Parents don't help out with contributing while teaching your child to stay in budget. I know I have twice with mines. Mainly because that parental instinct kicks in that my child needs my help. So, I gave my child that $2-4 extra she needed. Then one day analyzing what I was doing, I said to myself, one day I may not be around and she gets herself in a pickle where she goes over budget. I won't be there to help her, and she'll need to figure it out on her own. So, the next time we where out and about she wanted to stop at Meijets to get her something. I said to her, "You have a budget, and you have to stay in that budget.  If you go over you're just over, I'm not helping out this time." She looked at me dumbfounded.  I asked if she understood, and she responded she did.  Well, she learned to figure out how to stay in her budget. She'll pull her phone out and start calculating her expenses plus tax, and what she should have left. It's hard at first, but it teaches them how to spend. How to calculate expenses, do when they graduate from High School they will already know how to be a little more wise with their money.

Article:  Teaching Your Children Financial Responsibility - For Dummies