Money Management for Children - Part II
By Andrew Loh
As your children learn more about money management, they will show
signs of maturity and responsibility towards money. You may also get
to see them treating money as a precious tool of transaction.
However, children tend to commit mistakes whenever they are learning
new things. See that you are driving home important aspects of money
management from time to time so that your children will show a
unique attitude about spending and saving. Here are some more useful
tips to make your children money smart:
Discuss with your children about the power of money: One of
the most important aspect of teaching money management is to tell
your children what money is made of and how money helps millions of
families all over the world. You should also tell them how people
earn money and what they do to save money. You may also wish to
inform them how you spend your money every month. Your children
should know the mechanism of how money works and in what manner
people exchange it for necessary products and services.
Tips: Take your children to a departmental store to show
them how people exchange their money for products of their choice.
Explain them how people buy products and services and in what manner
owners of the shop fix prices for products. You may also need to
teach them the basic aspects of shopping and the technique of buying
products for cheapest possible prices. For example, let us say that
you want to buy a small carton of raisin. You may tell your child
that raisin is available for sale at a cheaper price and this is the
best time to buy some. Finding and buying cheapest possible products
should be the top most priority. However, tell your children that
they should remember about the quality of the product as well.
Do what you say: You should do what you say! Lead by a solid
example! If you tell something about conserving money, you should do
that yourself. Your children will be watching every action and
decision that you make or take. Be responsible, so that your
children learn that from you. Never indulge in reckless spending in
front of your children. If you are planning to buy some premium
products, make sure that you are justifying that decision.
Tips: Let us say that you want to buy a costly shirt. Now,
you may wish to tell your children that you are buying that shirt
for attending an important business meeting. Make sure that you set
your priorities right before buying anything.
Establish monthly limits: Never ever, be over indulgent! Set
a limit for monthly spending! Your children may ask for a number of
things, whose price may over-shoot your monthly budget. If there is
a demand for too may a thing, you may wish to tell your children
that they can buy those things in the coming months. When you bind
your children with a solid perimeter, they tend to restrict
themselves to that basic rule. There are too many things that your
child would like to buy. However, balancing your income could be
very difficult! Your children should know why spending too much in a
particular month could make the monthly budget go bad.
Tips: Ask your children to make list of things that they
would like to buy for the next few months. Make them attach a
priority to each of those items. Let the cost of items be within
your monthly budget.
Set monthly allowance: You must set a monthly allowance for
spending. Be strict about this important issue and act firmly with
this rule. Pay them their allowance once or twice in a month and ask
them to be prudent with their money. Children tend to do well when
they have their own money with them. In fact, they could even be
very careful with their money.
Tips: Make sure that your children save money out of their
monthly allowances. Open a bank account in their name and ask them
to deposit some money in the bank. The most general rule is to set a
limit of $1 per year of age for every week.
Teaching budgeting and spending plans: If you have older
children, you can start teaching them the basics of budgeting and
spending planning. With this approach, you can easily empower them
with the skills and knowledge of using the available money in a
Tips: You can use simple personal financial manager
worksheets to create these plans. Make sure that you are emphasizing
on the liberty that comes to them when they are writing their plans.
Money management is an essential skill and a big necessity.
Financially intelligent children can do a lot with their money. It
will also help them to create a financially better and brighter
future, when the little savings made by them grows bigger sometime
in the future.
Smart-Money Moves for Kids
By Judith Briles
When it comes to money, every parent needs a game plan. Dr. Judith Briles'
Smart Money Moves for Kids is designed for teaching kids
from 3 to young adult about the value and use of money. It
is laid out in 5 parts: The Game Book for Parent; Kids--From
Preschoolers to Preteens; The Teen Years; The Adult Rises;
and The Internet. Packed with games, quizzes, the stock
market, collecting, buying cars, even planning a wedding,
the author makes the money maze easier.
It covers ALL aspects of money management including
allowances, saving, spending, and developing the
entrepreneurial spirit, getting a job, using credit, leaving
the nest and much, much more. Smart Money Moves for Kids is
an excellent, and very readable, resource for all parents
(and grandparents!) who want their kids to have money savvy.