When you’re raising children, one of the most important things you, as a parent, can teach your children is how to handle their money. Children should be taught at a young age that they can’t always get what they want, when they want it. This automatically means that you can, and must, say “no” to children every now and then. This is also a good opportunity to teach children that life involves making choices and dealing with money is one of many areas in life where we need to evaluate our options and make a choice.
Get a piggy bank for your preschooler and teach him or her about the different sizes and values of coins. As early as possible, let your child save and spend his own money (perhaps at the dollar store) for certain things that he or she wants to purchase.
Any allowance given to a young child should be small, so he or she will ‘run out’ of spending money and consequently learn how to budget. When you go shopping at the grocery store, give your child a small amount of money for example, $5.00, to buy a certain item and tell her she can keep the change. This will teach her how to get the ‘best deal’ for the item she was assigned to purchase.
One good way to get children to save is to say you will match whatever they save (out of their allowance) if they keep it in the bank for 6 months, 1 to 5 years, etc. Whatever they spend is gone and not matched. This way they will watch their savings grow!
When your child grows older, his needs will change. He may start to nag you for additional money so he can get something that everyone else has! Don’t always give in to your child’s request without asking for something in return. You may want to give your child some extra chores to earn additional money so he learns that it won’t just be handed out. As a parent, you are obliged to provide the roof over their heads and their meals, but it is also your job to prepare your child for the responsibilities of an adult.
Personally, I also feel there should be certain non-paid tasks that are your child’s responsibility as a contributing member of the family unit. This can start as early as age 2, when your child can help do little tasks like putting her socks in the drawer. It may take a little more time, but you are teaching your child a valuable lesson in helping the family and, in the process, your child will be proud of his or her accomplishments.
Once your child is old enough to understand, sit down and show him or her some of your monthly expenses. Many people keep their financial affairs from their children, but when you share this information with them, they know what to expect in the future.
