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Five Proven Tips in Teaching Kids about Money
Successful money management is certainly one of the most important things that parents should teach to their kids. Getting into financial troubles and credit issues can cause shame, stress, and frustration, wasting the several years of your child’s life. Here are the five proven tips to teaching kids about money.
- Introduce the Basic Concepts of Money to your Kid at Young Age
As soon as you child learns how to count you should gradually introduce to him/her the concept of money management. Teach your child the difference between nickels, pennies, quarters, and dimes and explain the each denomination has unique value. Encourage your children to play bank or grocery store with play money. These games are very effective to teaching them bout he value of money and the concept or buying the wants and needs.
- Open a Savings Account
Opening a savings account for your child is ideal during his/her elementary years. The most practical approach is to open and passbook savings account at a credit union or local bank. The simplicity of passbooks such the record of withdrawals, deposits, and interest payments allow he to keep track of their savings. To encourage your child to save money, give them allowance in small denominations. For an instance, his allowance is $5, give him five $1 bills and encourage him to place $1 bill for the savings.
- Explain to Your Child the Family Finances
When children entered middle school, they have basic understanding how the family finances work. To make them a more responsible person in their finances, it’s wise to include them during family financial discussions. By making children participate in family financial discussions, they can gradually understand the importance of making careful buying decisions, the value of philanthropy and the importance of saving money for long term goals.
- Teach them Philanthropy
Part of teaching children about money is teaching them that they are also responsible for those members of society that are less fortunate than others. As a matter of fact, children natural sense of philanthropy. Encourage your kids donate to less used clothes, electronic gadgets, and unwanted toys to their favorite charitable institution. Encourage your child to volunteer for a charitable event during regular working days where many faculties receive less assistance. Remember that being a philanthropy is more than just giving money. It’s more about giving free time. Countless charitable organizations, libraries, and nursing homes are the best places to bring your children to learn about philanthropy.
- Let Your Kids Take Control of Their Money
Teaching money management skills to kids is one of the most difficult challenges that parents face when their child enters the teenage years. While it’s appealing to give your child a credit card account, it may encourage spending. A great alternative is giving your teen a reliable debit or credit card, wherein the card holder can only spend the amount deposited in the account. This helps ensure that your child will not incur debt and become wise in his spending since his budget for a week or a month is limited o the amount you placed in the account.
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