In order to educate your children about saving and the value of money, it starts with you, the parent. Most children don’t take classes on personal finance in elementary and high school; their main influence is life at home.
1. It’s important to introduce your children to money starting at an early age. Be open with them about money. Don’t make it a mystery. Let them hold the bills and credit cards you have in your wallet. Explain to them the purpose your checkbook and credit cards serve. Let them try swiping a card at the store so they can see how it feels.
2. Lead by example. If children see you working hard and putting away a good portion of your money instead of spending it frivolously, they are more likely to learn this is the right thing to do.
3. Pay your children an allowance based on the chores they do around the house, so they learn the concept of earning and don’t learn that money grows on trees.
4. Encourage your kids to open up a savings account at a bank or credit union. Teach them about the concept of earning interest on savings. Maybe even pay your children interest on the money they save at home.
5. Teach your kids how to read a credit card statement. Show them what the items on the statement mean and teach them to pay in a timely manner to avoid fees.
6. When they reach a legal working age, encourage them to get a part-time or summer job at places such as a restaurant or a summer camp. Here, they can earn money and then experience firsthand the thrill of spending something that came from their own work.
7. Encourage your kids to get excited about investing money. If they like to read the sports or entertainment sections of the newspaper, encourage them to read the business section too. Keep business television channels on at home from time to time. Make it fun.
8. If there’s something they really want—such as a car or a video game console—don’t just give it to them unearned. Help them see that they can get it sooner if they save money. They’ll learn to value money more this way.
9. Help your children keep track of how much money they’ve earned, spent and saved. This can help them understand the fundamentals of good book keeping.
10. Take your kids with you to go shopping. Show them how to use coupons and make buying decisions that save the family money. Help them learn how to compare different products. Show them different promotions you see—such as credit card offers—and have them participate in decisions you make about the offers.
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