In many families money is a taboo topic, but teaching children about money is an important part of parenting. Children who learn to save at an early age have a great advantage over others who have never been taught how to manage their money. Families can learn the process of saving together and enjoy the benefits of becoming money-savvy.
Teaching the concept
The American Bankers Association Education Foundation (ABA) taught over 1 million children how to save and manage their money in 2009. The concept was such a success the ABA expanded their education efforts in 2010. They would like to see every child have the opportunity to learn how to save for their future. Experts agree that you can start teaching your children about money as soon as they understand the concept that money can buy things.
You could begin by requiring your children to save 10 per cent of any money they receive. Start by matching every dollar they save and when they are older you can decrease the amount to 25% or 50%. Introduce your children to earning an allowance early. A weekly allowance may be appropriate for early grade school children but as they get older you can move “paydays” to every other week or once a month. Have them set goals to save as much as they intend to spend and still have money in their account. Allow your children to make their spending choices. That is how they will learn to budget their money and determine if the purchase was worth the money spent.
No more bailouts
Children will make mistakes as they learn how to manage their money. If they spend all their money and don’t have enough to go out with their friends then they should miss their outing. Loaning them the $20 may make them feel better but they will have learned that you will always be there for the bailout. That is a lesson that you will regret when they’re an adult and ask you to pay off their credit card bill. Teach them that you are not their personal banker and to save for their own future.
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