Wednesday, January 12, 2011

More For Your Money: How to teach little ones about money basics

More For Your Money: How to teach little ones about money basics

Teaching kids about finances can be challenging. It seems little ones have an unlimited supply of questions, especially when it comes to money. There are some easy ways you can help your kids learn the basics.

Jessica Darrington, a single mother of two, says it seems like her children are always asking for something at the store – and that telling them no just doesn't work.

Community Credit Counseling's Dona Graves educates hundreds of people, including children, every year on personal finance. Graves says the first step is to explain to your kids why you cannot afford something – and give them concrete numbers. "As parents now, we have to be more open about the family budget and the family expenses and explain to our kids what we're doing -- 'look, mommy has to take this money out of the bank every month and make the house payment,'" said Graves.

Additionally, explaining your family's budget will help your kids understand why they cannot always have new things. And while you're at it, use the conversation to talk about wants versus needs and how savings is integral to your budget.

Darrington says she has told her children that they cannot have an item until they can save up enough money to buy it. Once they save the money, they can go to the store together and purchase it. Also, give your kids something tangible to work toward. Seeing the money will help them understand how it works, so do not use debit or credit cards all the time.
"If you're at the check-out counter, for example, and you're paying with a debit card, tell your children 'okay, I'm paying with a debit card, but it comes out of my bank account. So this isn't free money,'" said Graves.

Finally, sharing is an important lesson for kids. If you're not already doing it, teach your kids to give. Talk about a savings goal, and pick a charity together that your child can get excited about. In Darrington's family, they chose the Humane Society because of their dog Mimsy.

Lauren Lowrey

Jan 4, 2011

1 comment:

Sofia Britts said...

It's actually very easy to teach a child how to save money that you would not need to bribe them or something. You just need to explain it to them, the way that they would understand it. Buy a coin back and then tell them that every penny put into it will be saved for their future. But you will need to level with them so that they will really understand what you're trying to say.