As part of our series, Financial Literacy for Kids, we will discuss many aspects of money management skills for kids. It’s important for children to learn this at an early age. By providing the best knowledge with these simple, yet valuable tips will help ensure your child a successful future.
Money Management Skills for Kids
Let’s Discuss Allowance or “Pay”
There are many diverse methods for choosing how you want to establish an allowance plan for your child. Some families choose to give their children a set weekly allowance, corresponding to regular chores.
Another approach is to incorporate an allowance that ties it into chores. However not the everyday chores they are already responsible for. These chores or “open jobs” could include helping clean out the refrigerator, wiping down stained walls, sanitize door knobs and railings, or help wash the family car. This teaches them responsibilities versus chores.
Grab your free printable worksheet to work with your child on earning an allowance or “pay.” There are two versions of the printable, a blank version so you can fill out on your own or the one shown below.
Every family is different when it comes to allowance. By giving your child the opportunity to earn money, you’re teaching them the value of money, and how to be responsible when making financial decisions. So, what if they blow all the money? Well, that will be a lessoned learned! It’s an opportunity to discuss why they are out of money and maybe next time they will make better choices. Remember, your child isn’t going to get it right every time, it’s a learning experience.
How to Spend Money…Wisely
There are many choices on what to spend money on, can’t we just buy one of each? Nope! It does not work that way. Teach your child to learn the question, “Do I need it or do I want it?” If they have a lot of wants, make two jars labeled “Want” and “Need”. This also is a great teaching device to show your child how to be patient while waiting for something.
I absolutely love to find the best deal! Helping your child to learn to compare prices will provide them with diverse money management skills. This will give them knowledge and responsibility of setting values and making decisions. On a trip to the grocery store, have your child help you compare prices of name brand items against the generic brand. Discuss the products prices, the bulk amount per cent and ingredients. Yes, quality does make a difference sometimes. Let’s take a product like chicken noodle soup, and compare the brand name to the generic. Does one taste better than the other? Is it worth the extra cost to buy the name brand? If you do not taste any difference, why not buy the generic? Save money!
Introduce a Savings Account
Take a trip to the bank and help your child open a savings account. Most banks have savings accounts that do not charge fees or has a no-minimum balance for children. Encourage your child to make regular deposits, such as every two weeks to help ensure that your child will gain money management skills more easily. Assist your child in balancing their savings account book and show them how they earn interest for keeping their money at the bank.
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