Accounting Tips

How To Teach Your Kids About Money

While some parents believe that financial lessons should be taught to their children when they are older, it is never too early to begin instilling sound money habits in your little ones. Children can learn much more easily than most parents realize and you can start teaching them as early as kindergarten.

You see, children are hard wired to know more about money than parents expect, since they are constantly deluged with advertisements that lead to them wanting new items (and letting Mom and Dad know about it). As parents, we have far more influence over the development of their spending habits than we realize.

Waiting until your children have the ability before teaching them about money is a good rule of thumb. When you take your children on shopping trips, use these excursions as a way to teach them about money. Children will inevitably tug on your sleeve and ask for things and when they live in a world where they are blissfully unaware of their cost, they will only continue to ask for more items in the future.

If the child knows that certain items cost more than others and that their parents have to save their pennies and make solid choices, this is advice that they are far more likely to take to heart. Parents who simply tell their children "no" and follow it up with the dreaded "because I said so" are not teaching their children to be fiscally responsible.

Your child needs to know that taking care of money is all about making the right decisions. For example, you may have the money in your account to purchase that shiny new bicycle or video game that has caught your child's eye, but spending this money will detract from your ability to pay bills at the end of the month. Children are far more perceptive and able to absorb facts like these than they get credit for.

Giving your children money of their own (pocket coins of different denominations work best) and allowing them to make a budget is an excellent way to drive this lesson home. Even the simplest budget preparation can help immensely. When the child knows that every dollar they receive in the future will come with a certain amount of effort attached to it, they are far more likely to appreciate the money they earn going forward.

Encourage your children to set aside some of their weekly pocket money to create a savings and let them know more about how you go about the same task. Being transparent with your children when it comes to money may seem foolhardy, but there is no better time to teach them than while they are young.

Advertisers and marketers start aiming their messages at your children as early as 18 months, so it behooves parents to provide their little ones with a sense of fiscal responsibility. The aforementioned tips and pointers can offer the necessary assistance to help parents do just that.