Introducing Your Children to Money

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Here are 14 simple ways to help educate children about personal finance and managing money:

  1. As soon as children can count, introduce them to money. Observation and repetition are two important ways children learn.
  2. Communicate with children as they grow about your values concerning money — how to save it, how to make it grow, and most importantly, how to spend it wisely.
  3. Help children learn the differences between needs, wants, and wishes. This will prepare them for making good spending decisions in the future.
  4. Introduce children to the value of saving versus spending. Explain and demonstrate the concept of earning interest income on savings.

 

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Allowance and Spending Decisions

  1. When giving children an allowance, give them the money in denominations that encourage saving.
  2. Take children to a bank to open their own savings accounts. Beginning the regular savings habit early is one of the keys to savings success.
  3. Keeping good records of money saved, invested, or spent is another important skill young people must learn.
  4. Use regular shopping trips as opportunities to teach children the value of money.
  5. Allow young people to make spending decisions.

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Buying Smart

  1. Show children how to evaluate TV, radio, and print ads for products.
  2. Alert children to the dangers of borrowing and paying interest.
  3. When using a credit card at a restaurant, take the opportunity to teach children about how credit cards work.
  4. Be cautious about making credit cards available to young people.
  5. Establish a regular schedule for family discussions about.

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