How To Teach Your Kids To Handle Money

Parents are the first teachers that a child will ever encounter in the world and as they grow up, they will eventually need to learn how to handle money and financial issues. Children tend to follow in their parents foot steps and can sometimes deal with their financial matters in the same pattern. Kids are like a sponge and when they see something their parents do with money, they might do the same in the future. By following this advice below, children can learn money management earlier and avoid debt and money problems later.

Children need to learn about money and how to treat it with respect at a young age. It is best to teach then that money is earned and it may be a good idea to give them little chores or errands for their allowance instead of giving it freely every week. You can open a saving account for them and let them learn how to deposit their first few dollars. Give them the opportunity to make withdrawals and deposits and to manage their bank book if they have one. A child will feel instant trust from you as well as freedom and will begin to respect money rather than throw it away. They may make mistakes, but they will learn from them in time and it is good to tell them that you are always around for advice or help.

The worst mistake a parent can make is by giving money freely to their kid(s) because they will begin to develop a different feeling about money. If they are given what they want, whenever they want, they will never learn the importance of money management and will carry these patterns with them into their adult life only to hit rock bottom by reality. To prevent your kids from having this type of ‘reality shock syndrome’, teach them how to save and how to keep a little of their allowance each week. Even piggy banks have worked well in the past as a savings account. Banking is probably the most suitable way to go nowadays as they will be dealing with a bank throughout their lives eventually. You can even tell your kids stories of when you had trouble managing money and how you got back on track. It does not matter if you were a shopoholic or a penny pincher, either way your story will teach them something about the value of money.

How your child treats money in the future depends on you as a parent and you have the ability to get your kid started off on the right track. This is the track where money does not grow on trees or is handed on a silver platter, but rather it is earned, saved and managed for the future.

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