CHILDREN AND MONEY
You can give your child a boost toward becoming a good money manager if you manage your own money well. For better or for worse, children learn how to handle money from their parents. Also, like parents, they are tempted by advertisements.
What you tell a child about money depends on his or her age and ability to understand the information. Money discussions can begin as early as pre-school and continue right through the late teens. With today's home computers and the availability of programs that teach children about money, children can learn the basics in an enjoyable way at an early age at school and home.
Benefits of an Allowance
Giving children an allowance helps them make spending decisions. It teaches the child the benefits of saving money today for important goals later in life. Having a voice in establishing family goals will help children realize that the family is working together to set priorities and solve any financial problems that might occur.
Helpful Tips for Allowance
In determining an allowance for your child, follow these suggestions:
- Provide an allowance as soon as your child is old enough to understand how money is used in exchange for things that are needed or wanted.
- Discuss the kinds of purchases the allowance should cover. Frequently, misunderstandings about money occur among adults when there is a lack of communication; with children the same holds true.
- Make saving on a regular basis a part of the allowance.
- Encourage your child to give a church or charity.
- Evaluate children's allowance periodically. Remember that as children grow older, the amount may need to increase. It's a good plan to have them account for their allowance at month's end. It will help the child to gain an appreciation of how much they saved and spent.
- Instruct teenagers about using and maintaining a checking account.
- Teach children how to use credit wisely, as it will be part of their future.
- Set an example for your child. Manage your money. Don't let your money manage you.
