Authored by Tamara L. Waters in Child Education
Published on 07-28-2009
Mom and Dad, how many times have you lived this scenario: Your child asks for something – a new toy, a treat at a fast food restaurant, a trip to the movies? You don’t have the money to spare and you are honest about that fact with your child. Your child then responds with the suggestion “Well just write a check (or use your credit card or go to the bank to get money).” It’s enough to make a parent cry in frustration! Rather than beating your head against a desk, use some of these ideas to teach your child about money and help them understand why it’s not a simple matter of “just going to the bank.”
Why is it important to teach children about money and money management principles? Adults don’t have the luxury of playing with money without consequences. If a job isn’t worked then money isn’t earned. If money isn’t earned then bills don’t get paid. If bills don’t get paid then someone doesn’t have food to eat, electricity or water, a place to live or a car to drive. If too much money is spent on fun things rather than paying the bills, there will be problems. It’s a valuable concept that kids need to learn.
Give them an allowance
Require your child to put back a certain amount of their allowance for church or charity (a good rule would be 10 percent), a percentage to savings (either a bank account or a savings jar), and the rest is available for their spending money.
Make them work for their allowance
Assign specific daily chores and duties to each child. Even a child as young as three can complete simple tasks. Keep a list of assigned chores and keep track of chores completed and chores not completed.
Set up a bank account
Most local banks have savings accounts specially-designed for kids. Check around to see what your bank has to offer. Take your child with you to open the account so they can become familiar with the process. Keep their account book in a safe place and show them how it is reconciled.
If you don’t want to set up an account at a bank, create an “in-house” account for your child. A jar can hold the deposits. Use your computer to create a spreadsheet for deposits and withdrawals. If your child is old enough to do the required math, allow them to keep track of deposits and withdrawals and reconcile the account on their own.
Don’t give them extra money
This is a hard one – because parents want to help their child and give them things they want. Don’t give in to the temptation! When your child has 10 dollars and they find an item that costs 12 dollars, don’t give them the extra. Parents must wait and save their money to buy an item that costs more than they have on hand – the kids should learn this important principle also. It will serve them well throughout their lifetime and is easiest to adjust to if instilled early on.
Teaching your child about money is an important lesson they will need later on. Find ways to make it fun for your child and they will be more inclined to take the practices to heart and keep following them as they grow older.