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Step 1
"Money doesn't grow on trees," said my Dad many, many times. That was about it for what I was taught, as a child, about money. Oh- I learned a lot more, but it was by observation of how my parents handled and discussed money.
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Step 2
What separates a conversation today with a child and what my Dad could have told be back then is the use of credit. Children who see your use of debit and credit cards need to understand that banks charge money to use thes cards, and although credit and debit cards are convenient, people need to pay close attention to their use of cards in order to avoid paying far more for a purchase in fees and charges.
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Step 3
Take a look at your use of money, credit cards, and checks. What your child observes watching you speaks volumes above any other lesson in money. You may not even be aware of the subtle, but powerful messages you send to your kids with your ever-so-easy use of credit cards and by your unplanned, impulse purchases.Talk to your child about money, but make sure you are not sending a stronger message in what you do with money.
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Step 4
Start by providing personal experiences with money for your child. Help them understand money with how they use their gift money or allowance.
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Step 5
"Watch your pennies and your dollars will take care of themselves." is as relevant today, in concept, as it was a generation ago. As pennies have seemed to lost all value in our lives, we can maybe make that adage read: "Watch your quarters and your ten dollar bills will take care of themselves." Show your child ways to spend a little less on more frequent purchases over a week or month's time. A dime or quarter saved on milk, bread, juice, meat, paper products, gasoline, diapers for the younger brother or sister, - can really add up.
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Step 6
The real education about money is in those everyday purchases that make our money get away from us.
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Step 7
Even young children can begin to learn about saving and investing so that money "grows" -- maybe not on trees, but there is the potential for growth in money for the future. Make it age appropriate, but you can talk about how money is used to make money.
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Step 8
Help your child save in some money in some way whether it is with a child's bank account or with the traditional piggy bank or other special box or container. Guide your child in seeing that spending now will restrict options for purchasing at a later time. choices for the future.
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Step 9
"You mean water and heat cost money?"
Children cannot be worried about adult issues, but they can be more aware of your household use of water and power. Talking to them in a quiet moment about this will be much more effective and be received much better when you are yelling,"Turn off the shower!" or "Close the door. We don't want to air condition the outdoors!" -
Step 10
Plan for big purchases- cars, appliances, furniture, electronics.
These are complex decisions and even a young child can begin to understand that you don't just run out and buy a new car. To the extent that it is appropriate for your child's age or maturity level, show your child that you need to put money aside for repairing or replacing an appliance or car or truck.
