Here are 14 simple ways to help educate children about personal finance and managing money:
- As soon as children can count, introduce them to money. Observation and repetition are two important ways children learn.
- 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.
- Help children learn the differences between needs, wants, and wishes. This will prepare them for making good spending decisions in the future.
- Introduce children to the value of saving versus spending. Explain and demonstrate the concept of earning interest income on savings.
Allowance and Spending Decisions
- When giving children an allowance, give them the money in denominations that encourage saving.
- 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.
- Keeping good records of money saved, invested, or spent is another important skill young people must learn.
- Use regular shopping trips as opportunities to teach children the value of money.
- Allow young people to make spending decisions.
- Show children how to evaluate TV, radio, and print ads for products.
- Alert children to the dangers of borrowing and paying interest.
- When using a credit card at a restaurant, take the opportunity to teach children about how credit cards work.
- Be cautious about making credit cards available to young people.
- Establish a regular schedule for family discussions about.