How to Teach Your Tweens the Value of Money

The tween years are a great time to teach your child about the value of money. It is at this age when they begin to make independent purchasing decisions, and they need to understand that mom and dad do not serve as never ending ATM machines. They need to understand the kind of work that it takes to acquire money and how to spend it wisely. Here is how to educate your tweens about the value of money.

Difficulty: Moderately Challenging

Instructions

1. Set up a system where you pay your tweens for doing a job. Your money does not come to you for free, and neither should theirs. If you do not want to pay them for household chores (as they should be doing them anyway), find an additional job they can do, or help them find a job outside the home.

2. Charge your tween for services. Sure there are things you will do for your child out of love, but your child should have to pay for services they receive from you. If you do their laundry when they are perfectly capable, or you clean their rooms for them, they should pay you. If you do an excessive amount of driving them around, perhaps you should charge them cab fare. Consider charging them a small amount each month for room and board (if they make enough money). I know one family that gave their tweens several hundred dollars a month and had them pay for everything from their share of the mortgage and food, to all of their own clothing. If you feel guilty about charging your kids money, you can secretly put the money into an account for them which they can later use to buy a car or use for college.

3. Help them set up a budget similar to yours. For example, no more than 1/3 should go to living expenses. At least 10 percent of their budget should be saved. Another 10 percent should be donated. Have them also set aside a reasonable amount for clothing and entertainment.

4. Teach your child how to use credit wisely. Set up a fake credit card with your child where they would come to you for an emergency advance. They would then have to pay you back with interest each month. When they have maxed out their card, they will have to deal with the consequences. Show them on paper how much money they have wasted and how much they would have saved if they had planned for emergencies in advance or waited to make their purchase.

5. Be a good role model. Do not let your child see you using the ATM as if it is bottomless. Do not let them see you make impulse purchases with a credit card. Do not let them see you crushed by debt. In other words, be responsible with your money so they will model after you.

[JRIngrisano]

on 5/3/2008 This is a good piece. Thanks. J