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Ways
to Teach Your Children to Manage their
Money Well
To
keep track of your child's money, first get some
containers. Two to four. Plastic food containers or cleaned
out
cottage cheese containers work well. Your
child will be putting their money in these
containers.
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One
container will be for Things I Want Now.
Such as a video game rental. Snacks from
vending machines. Candy from a candy store.
A comic book.
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The second is for
Things To Save For. Such as a computer game.
Bike. Toy.
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The third can be for
Gifts. This will enable your child to save
for holiday presents and gifts for Mother's
Day, Father's Day, and their sister's
birthday.
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The fourth
container can be for Charity. You can
match this money with your own if you
desire. Have your child pick an
organization they feel is worthwhile,
like the Red Cross or the Humane
Society. Or they can give money to their
local veterinarian for any pet owners
who do not have enough money to help
their sick pet.
Now label
the containers. You can write on masking
tape. Tape labels on lid or side of
container. The side is better if you plan to
stack containers.
You might
be asking yourself how should the money be split up? This is how you
can do it: Let us say your child gets two
dollars a week for doing chores. (Note: I do
not believe in giving free allowance to
kids. They will never truly know the value
of a dollar until they have to earn it.)
Talk to your child about how they want to
divvy up their allowance. Maybe seventy-five
cents can go to Spend Now. Fifty-cents to Save
For. Fifty -cents for Gifts. And twenty-five
cents for Charity. Down the line some kids
might take from one container and put it
into another container. If this happens do
not freak out. #1, they are kids. #2, it is
their money which they have earned. But if
you see this happening you should point out
they will not have money for gifts and
charity later if they keep on taking from
Spend Now. Some kids might not care. Some
kids might say they will give back to their
charity and gifts containers next month.
Wait to see if they do. If they do not, this
blasé attitude about where money goes could
blow over when they are older, or it might
mean they will end up as individuals who
take from Paul to pay Peter. If so, you can
console yourself by knowing you tried to
teach them money management when they were
younger. But do help an older child by
showing them how to organize their money.
Give them a little handheld notebook. Have
them write down how much money is in each
container. Every time they take money out
they are to deduct it. They should have a
sum total of how much is in each container.
If your child goes along with this money
management system, they will have pocket
money for gifts, have saved for a
bike/computer, and have still enjoyed the
little things in life like candy and a comic
book.
Reasons to open
a savings account for your child:
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For kids who want to save money
but find it too temping to have containers
around with money they can not spend right
away. Since banks do not separate your money
into sections for Gifts, Charity, and Save
For, do it yourself. Once again give your
child a small notebook and have them write
down deposits and withdrawals.
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Having a
savings account teaches your child about
saving. You don't your want your child to
spend, spend, spend and never save for a
rainy day.
Here's another
idea. You can talk to your
child's teacher about having Money
Awareness Month. The idea behind this is to
teach kids how to budget properly. Some
schools do this in the fifth grade. Each
student is given a fake credit card, plus
pretend money (from their pretend job). They
are given money every week for four weeks.
Once a week students go around classrooms
pretending to buy groceries, shoes,
household gadgets and other such items from
other students. Kids are shown pictures of
clothes, food, gifts… and asked, "Would you
like this?" If they say yes, fake cash is
taken or a credit card slip is written up.
Students also must use their pretend money
to pay for rent, utilities, car insurance, and car
loans. After a month it comes down to could
they balance their budget? Could they pay
off their credit card bill? Or did they get
themselves in debt? This is a fun way to
learn about money management.
Like what you read?
Read more monthly and bi-monthly articles on
my Parenting Blog
parentingtipsandmore.blogspot.com
If you have a child who is
argumentative, rude, out of control,
defiant, difficult... or has ODD try the
Total
Transformation
Program. You can read reviews on my site at
Harmony-in-the-Home.
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