Abc’s, 1,2,3′s and Money Doesnt Grow on Trees

Even young children can learn respect for money, here are some tips and tricks for teaching your children how to handle money!

Have these words ever escaped from your lips? “You kids have to learn that money does not grow on trees.” There is only one way for children to learn how to handle money; they have to be taught by their parents. You are their greatest influence.

Kids see their parents using plastic and learn by osmosis the wrong lesson. Money does not grow on trees but comes from a machine. Parents pay for dinner or groceries using their credit or debit cards. Kids are prompted to think plastic is the same as money.

Kids have a fascination with money. They understand that money can get them what they want. However, they do not draw a connection between the plastic passed to the waitress at dinner time and their parents going to work everyday. Going on a rant when one of your kids asks for ten bucks does not make it clear.

Parents have to clear it up for their kids.

Take your kids to the bank when you deposit your income. Explain to them that you are compensated for the work that you do, and the money you receive supports the family. Explain how in simple terms. Tell the child just enough to educate him on how things work. Don’t burden him with too many details. He shouldn’t be placed in a position of worry.

Provide an opportunity for your child to earn money.

Your child probably has an article of interest which he is itching to buy. Teach your child to save money from each allowance, or pay day for what he wants and for charity. Most children have generous spirits. Encourage your child to act on that generosity. Teach her that there is always someone less fortunate than her. Lead by example, be generous yourself and give to a deserving cause.

Teach your child about plastic.

Inform him about how credit works. Using credit cards prolongs what is inevitable. When using a credit card it is necessary to pay back the money which is borrowed, and sometimes more, depending on the interest which is charged. Teach the child not to use a credit card unless he is able to pay for the items immediately. The longer he waits the more interest accrues. Teach him how to use credit responsibly. Overall discourage your child from using credit cards, drawing his focus on saving instead.

At an age appropriate time, graduate your child from a piggy bank to a savings account.
Teach him to manage the bank book and to curb his spending. Guiding your child through a financial maze while he is young will serve him positively when he is on his own.