How to Teach Children About Money

Children today are given huge allowances and expect the best of everything. They haven’t got a clue about the value of money or what it takes to earn it. If children are given allowances and made to account for their money, they will get a head start when it comes to dealing with financial issues later on. When they are old enough to have a part-time job, these lessons can be expanded towards savings and goals.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Recipe type box big enough to hold small envelopes
• Package of small envelopes
• Note pad for tracking expenses

1. You don’t want to start this process before the child can add and subtract without too much trouble. Around 12 would be about right.
2. Let him know how much allowance they will be receiving. Don’t alter this commitment unless dire family financial circumstances arise. The point here is not to get the kid to work for the allowance; or for it to be used as a reward. It is to teach basic bookkeeping
3. Once you have arrived at the amount, sit the child down and hand over the tools of this learning experience. Seeing actual cash makes this much more real than dealing with a credit card or bank account for now. Help the child break down the cash between fun, food, savings and any other categories that come to mind. Emphasize the fact that you plan on checking up on the books. There will be trouble if savings ends up empty.
4. Use the notepad to divide up the initial money, labeling each category. Design the page to allow for additions and subtractions. Set a time to sit down once week to go over the books. Be sure to allow for changes once the child has a part-time job.
5. Stick to your guns on this and you will have set your child on a path that he will life. Don’t let a busy schedule keep you from checking up.