Teaching kids about money can be a challenge as keeping them interested can be a challenge. The topic of money can come off as boring, if not done properly. This means that time needs to be taken to show your young kids how to be smart with money. Personal finance is something that young kids should know at a young age. This means follow a few tips to raise money smart kids.
1. Piggy Bank
This is something that should be done from day one. A piggy bank can be added as an accessory which is used to deposit spare change. Younger kids may not understand the concept of money right away, but the concept of ownership will begin to develop.
2. Allowance
Young kids can be given a small allowance starting at age five. This is an age where kids need to begin to pick to various tasks around the home. Simple tasks may include putting away toys, folding laundry, and even sweeping the floor. Make a list of a couple chores to complete each day and reward kids with a few coins to put in their piggy bank.
3. Extra Income
Certain tasks around the home cannot always be done all the time. This includes vacuuming out the car to washing windows. One option is to set a value or dollar amount for each task completed. This needs to be a set of task that are not included for a weekly allowance.
4. Savings Account
A weekly or monthly trip to the bank is a great way for kids to learn about saving. Ask your local bank to see if they still have bank books for first accounts. The best age for a child to have a savings account is between eight and ten.
5. Summer Job
Young kids that have a summer job can earn money to save or put towards a goal. One job that offers a good way to make a few bucks is a lemonade stand. This is something that can be done on any day that a community has weekend garage sales.
6. Insist on Savings
Money that is available to kids means it can easily be spent. One option is to insist that a child keeps only a small amount for spending and put the rest into their piggy bank or savings account. This is a great way to show young kids the value of saving for the future.
7. Limit Restrictions
Spending money wisely is just as important as savings. This means not micromanaging the way a child spends their money. Making a mistake or two is needed for them to learn. However, make sure kids are limited in their spending.
8. Teach Responsibility
Parents need to be the role model when teaching spending habits. Another aspect to keep in mind is the cost to replace lost or broken items. A child that is not responsible may not know that items may not be easily replaced. Kids should know the cost to replace items so they are not intentionally broken.
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