Children & Money
It's never too early to teach your children about money management. Although many people think children & money are never a good combination, moneymyths.org believes the earlier children learn about money and how to manage it, the better their chances of developing good financial habits as adults.
Children & money should be introduced to each other as soon as children learn how to count, according to moneymyths.org. Parents should also teach their children about their own financial values when it comes to saving, earning, and spending money. When children ask for expensive toys or other items, parents should encourage them to save the money they need to buy them and teach their children the difference between things they want and things they truly need.
Another thing parents should do as soon as their children are old enough to understand is teach them about interest. Parents who offer to pay interest on the money their children save, or even match the amount of money their children save, will teach their children that the best way to establish good credit is a history of successful savings on a regular basis.
Other effective ways to pair children & money include letting children open their own bank accounts and giving them regular pocket money in exchange for household duties. Each shopping excursion also provides many opportunities to educate children about money. It is also important to let children make their own spending decisions, even bad ones, so they will learn from their mistakes.
A good way for children to keep track of their money is to use a dozen envelopes, one per month of the year, and encourage them to put the receipts from their monthly purchases inside the envelopes. Many more tips on educating children about money are on moneymyths.org.