Photo by : Cathryn Farnsworth
“It is important that we give our kids opportunities, starting at a fairly young age, to understand the value of a dollar.”
Teaching our kids good financial responsibility starts as young as they are aware of what money is and how it works. Our attitudes and behavior, consistencies or inconsistencies imprint a lot of information on their developing relationship with money. It is important that we give our kids opportunities, starting at a fairly young age, to understand the value of a dollar. We hope these guidelines will prove helpful in helping your kid manage money.
1. In the younger years of elementary School, give them opportunities to delay gratification. There are situations for lesson learning that will directly involve the ability of choices and consequences. Talk through simple budget ideas with them. If I can spend twenty dollars at the fair today, what can I afford to buy and do? You will have to talk through choices of what may have to be eliminated in order to stick to the budget. If I want to ride the carousel, that means I can only get two slices of pizza but no soda. This develops good problem solving skills as well as the ability to understand we can’t always get everything we may want.
2. As your child gets a little older, say second grade or so, give them an understanding of the difference between a want and a need. They may already have very specific ideas of brands they may want and it is up to us to explain the difference of necessities versus luxuries. You may want that expensive dress from Crewcuts but you need a warm jacket to wear.
3. It is never too early to set up a savings account and establish simple saving strategies. It also helps that your kids may have opportunities to start saving in the form of chore based earning of allowance. This way they can start to establish a sense of respect for the hard work that goes into earning their own money. They may have set their sights on an expensive item and giving them an opportunity to save for it is a lesson that will last a lifetime.