Teaching Kids Financial Responsibility

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Kids should learn sooner, rather than later, about financial responsibility. Teaching them early enables them to become responsible teens and adults, especially in how to handle their own money. Young children don’t need to learn the hard adult financial lessons involving paying mortgages, monthly rent responsibilities, why you might need to apply for Maxlend quick personal loans, or paying bills.

Yes, parents need to teach their children the value of a dollar and how to work toward a financial goal in life, but not at age 2 or 3. Money managers and pediatricians believe that age 5 is a good beginning to playfully teach kids about money management. The best method to use for learning these new experiences is by showing and teaching them with the activities that you perform every day.

Remember to keep the topic of money a light and fun lesson. Remain patient and show the kids by example. Below are 6 things that a parent can teach kids about money:

1. Paying For Chores

Children should naturally be taught to perform chores in and around the house, but getting an allowance for these chores is always a good method to teach about money and provide more attention to the word of “earned responsibility.” Typically, paid chores can include making their beds, clearing the dinner table, helping fold clothes, picking up their toys and clothes, load the dishwasher, etc.

2. Bank Accounts

When children begin their allowance habits, teach them to save and not spend money right away. Young kids can start by labeling cans or jars with the denomination of each bill and one for loose change. Another saving method for older kids is to take them to a bank to open their own savings account. Banks offer no fees and there are no minimum account balances. Children can learn about keeping track of their savings with their own bank book which the bank will provide and how to match it to their savings statement each month. Saving accounts help to teach kids how to save for things they want. Grade school kids can learn about money because they need to pay for their school lunches and in-between snack foods.

3. Grocery Shopping

With grocery shopping, begin by introducing children to choosing products that are within a specific budget. Give a child a small bill like $5.00 and give them a list of two items that should total the money you gave them for products that come in different sizes, brands, and price. If they fail at the beginning, continue to encourage them, but continue with this process. Kids learn to think about value. They ask themselves which is a better deal, and they stop to take time to think through their purchase options for the amount of money they have to spend.

4. Neighborhood Jobs

Teens can learn how to make money by getting neighborhood jobs like raking leaves, shoveling snow, watering gardens, or washing cars. Also, many young people are becoming entrepreneurs involving things they enjoy doing. When your teen or tween suggests an out-of-the-box job idea, listen, advise, and encourage. When kids get to this point, the real-life lessons of capitalism begins, but in a show-me environment. Our children need to see business ups and downs for themselves. It’s hard for kids to process that the real world is bigger and a little harder than they know. Parents must guide them and support them along the way. Sometimes it will be painful for them, but it means having them learn business rules. What’s important is that they know that you have their back.

5. Partnership

Saving money for a specific purchase for a kid can make it seem like it will take forever to save. Life is stressful enough without this added pressure. Make a partnership agreement with your child. The whole idea is for them to succeed in their attempt to save for something. Match their savings to help them reach their goal. For example, for each $5.00 they save, you will match it. This lesson teaches them goal setting.

6. Teach Giving

When kids start earning their own money, one of the most important lessons they can learn is to give. Charity begins at home and kids watch your actions and learn to follow your lead. Teach kids that money is needed to buy things but it is not the most valuable thing in their life. Family and helping your fellow-man is a valuable lesson. A grade-school boy asked one of his schoolmates why he never wore sneakers to the gym. His classmate said that he did not have any. The young boy took his savings and purchased sneakers for him. This started the idea of helping other kids with sneakers and the young entrepreneur is helping kids around the world.

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