Give_Kids_Practice_Money

When I was growing up, my mother taught me some very important lessons about money, credit, and balancing your finances every month. All this before I graduated high school.

Little did I know, she was teaching me real-world skills that I was never taught in school or at the University. These skills are what I use every day of my life, and they’ve allowed me to find financial freedom before I turned 50 years old. 

Reflecting back on what she did, here are 3 of the key things she did with me:

1. Give Kids Practice Money

 

While the allowance money was off-and-on, and mainly determined if she had any money for allowance, it wasn’t the only source of money for me to practice with. I was supported, begrudgingly, to get a paper route in the sixth grade.

Going home every day to fold and deliver newspapers was a big responsibility. Especially when my friends were going out to the park to play ball. And let’s not forget about Saturday, and the dreaded 5am wake up to fold and deliver the massive Sunday paper. Nothing more than that job experience taught me the real value of a dollar!

Point is, I had money every month coming in. And I had money to practice with. 

Parents can give their kids practice with money in a variety of ways. They might give them a regular allowance, pay them for tasks that go above and beyond their normal chores, reward good grades with cash, or encourage them to save for special purchases or charitable donations. The specifics don’t really matter, nor does the amount of money, which may vary based on a family’s financial situation, LeBaron said.

The important thing is that parents give children hands-on experience with money early, when the stakes are still low.

via Parents: To Prepare Kids Financially, Give Them Practice with Money

2. Teach Kids Where To Put Money

If I remember right, my mom had me open a kids savings account when I was in the 4th or 5th grade. The smart thing about doing this is the money wasn’t immediately spendable. It was no longer sitting in a piggy bank that I could crack open on any whim. 

I still remember one Sunday we were at the shopping mall with me in tow, bored to tears. When I talked her into one of the toy stores and asked to buy a toy. She replied, “sure, but you have to spend your money for it.” To which I replied, “OK!”.

Then she said, “oh darn, it’s Sunday, the bank is closed, you can’t get any money out today”. I believe it was supposed to be a lesson in planning and money lock-up times with a bank. To her surprise, and I still remember the look on her face, I told her, “I have my wallet and my ATM card is right here. See!”. She was confused, what’s an “ATM card?”. You see, this was in the 70’s and ATM cards were still very new. She didn’t even have one yet.

I walked her over to the bank, put my card in the computer looking machine, and quickly withdrew a crisp $20 bill. She was in utter disbelief and I think a bit amused at the same time. 

The moral of the story is, there are lots of places to put money. Thinking a piggy bank is the best place for a kid nowadays is an old concept. There are lots of places as adults you can put money, let kids learn about banking as early as you can.

Mark Tilden’s Adventures of Princess Mikalia and Prince Pete teaches children basic financial concepts.

Tilden wades into the “money for nothing” debate with the three-piggy-banks concept, which isn’t new, but that he’s tweaked to drive home a financial-concept lesson. “Every week, kids should split their allowance three ways: long-term savings, spending, charity,” Tilden says. “They can choose how much to give to each, so they are thinking about what money goes where. They can still blow most of it, but it’s up to us to nudge them in directions that make sense.”

via How to break taboos and talk to kids about money

3. Let Them Get Hands-On Experience

Hands_On_Experience

 

As parents, we like to teach kids things at a young age. If they fall, they bounce better than adults. You can do the same with money. The risks and dangers of mismanaging money is less and easily supervisable by you. 

Waiting until their 18 years old or in college is too late. They’re independent and for most, they think they know more than you by this time. So it’s very difficult to teach them about money at that stage of their life. 

Get money in their hands and let them learn from their mistakes. 

LeBaron and her colleagues at Brigham Young University interviewed 115 student participants, including 90 college students between 18 and 30 years old, and their parents and grandparents. The research showed those who had hands-on experience with money while they were growing up learned how to work hard, how to manage money and how to spend it wisely.

via Want your kids to be better with finance? Don’t make them afraid of money

 Conclusion

Money management isn’t only for adults. Kids brains are like sponges and they learn quickly. Let them spread their wings and learn to fly while you can hover over them and make sure they learn valuable lessons about money. 

How about you, any tips to share on how you taught your kids money management?

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