subject: Children and Money [print this page] Children and Money Children and Money
Have you ever noticed that your children seem to think that money grows on trees? Wouldn't that be nice! I am here to help you put your children on the road to handling money responsibly now and for years to come. Remember, when it comes to teaching children about money, sooner is definitely better. At a very young age, children love to collect and save pennies. I remember my six year old would love to go into my husband's closet and pick up all the loose change on the floor. With this in mind, families can talk about the family's budget together.
Now, I don't want you to worry your children about bills or making enough money. But, it does mean explaining to them there is a certain amount of money that comes into the house and there are certain expenses, such as food, utilities, the mortgage and clothing that must be paid for with that money.
You can also explain that there is a set amount every week that should be saved for emergencies. Now, you do not have to go into details about how much, just the concept will suffice. When you start giving them an allowance you can explain to them that they should do the same and save a certain amount. Once children learn how money works, they often display an instinctive conservatism. You want to make sure you channel this urge in the right direction, it can determine the kind of financial manager your child will be as an adult. An allowance can be an effective teaching tool. Giving them small amounts of money when they are younger, helps them prepare for when the numbers are bigger and the stakes are higher. Along the same lines, you will want to teach your high schoolers about banking and credit. This will make them more savvy when they move out to go to college or start their career. Teach your older children how to use a check register, balance the check book and how to use a credit card (the right way). I cannot tell you how many adults I have met that have never kept a check register and just trust the bank's balance. Believe it or not, banks do make mistakes, not to mention fraudulent charges that could go unnoticed if they do not keep track of everything. Credit cards are a wonderful way to increase your FICO score, if used properly. Teach your children that you should never put anything on their credit card they cannot pay off by the end of the month. If we play our cards right, we can create very savvy financial managers. I, for one, plan on doing all that I can do. I hope you will too.
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