Tuesday, November 28, 2006

5 Skills To Teach Your Kids

There's a lot my parents never talked about with me and my school never covered that I had to learn on my own, especially when it came to finance. I wish that my parents had helped me to develop good habits when it came to money but unfortunately, I had to learn the hard way. This article will give you a few great ways to help your kids get a head start on money management.

  1. Manage Checking/Savings Accounts
    Most guides will tell you that teenagers need to know how to manage their checking/savings accounts, but I firmly believe that you should start teaching your kids about these things at an even earlier age.

    Every child should have an account for their own good and learn how to keep it balanced.

  2. Managing Allowance
    I recommend starting your children early on allowance, no matter what your financial situation. I also believe it should be set up according to their age.

    If your kid is 12 years old, give him $5/week to spend and don't pay for him. Let him figure out how valuable money really is when it comes to paying for even small things.

  3. Goal Saving
    On top of teaching your kid how to manage their allowance, throw in the added complication of saving up for a goal. No matter what the goal is, this will teach them money management that will help them for the rest of their lives.

  4. Price Comparison
    Comparison pricing at the grocery store is a fantastic way to teach children how they can save money to reach a specific goal and still buy what they need. Start with cereal comparisons and work your way up to clothing. They should know that brands aren't necessarily everything.

  5. Time Value of Money
    And finally, your children should know that money saved over time can amount to a lot. Start your kid up with an INGDirect or HSBC account and let them put their own money into the account and watch it grow. Make sure they know that whatever goes in gets locked in until they're older. This will inspire them to save as much as they can. Run some numbers with them to help them see how easy it will make their lives later on, especially if you show them how they can actually become millionaires at an early age.
Hopefully you use these tips to guide your children on the right path to financial freedom. They'll thank you later for the lessons you hard-code into their little brains.

1 comment:

Liz said...

My son is 14 and just entering high school. It seems everyday I am being bombarded for $10.00 here or $5.00 there. It adds up!! I'm trying to figure out a way to teach him better money management and the value of a dollar. Recently when he asks me for money I'll tell him he can have the money after he does some odd chore that i find for him. I just don't know if that's enough. This article and comments have been very helpful. I found another site that has been very helpful as well:
I hope this helps other parents out there in my situation!