Starting Kids Out on the Right Financial Track

September 19th, 2011 | Banking, children, Money, Personal Finance

Many of the best lessons we can learn about personal finance are taught when we are very young. By laying a strong financial foundation for your children, you can help shield them from making catastrophic financial decisions in the future. There are some great options available out there that can help any child learn more about money, how to handle it and how to respect it.

There is a lot to be said for a paper route, or even earning money for doing chores. Instead of handing out an allowance as an obligation, teach your kids to respect that money by having them work for it. We’re not saying put your three year old to work scrubbing floors, but once your kids are around the age of 9 or 10, they should be able to start grasping the concept of work = money.

This can have a pleasant side effect of reducing spoiling, and will help your children realize that hard work does pay off. Introduce the concept of bonuses early on and they will be able to stay motivated and keep on track. But you can just stop here. Now that your kids have money, they need to know what to do with it.

The best solution is to open up a kid-friendly checking account. Most banks now offer options for children’s accounts and this can instill a brand new sense of responsibility. Open an account with your child and make sure they understand the basic principle of not spending what you don’t have.

They may need to learn this the hard way, but over time, this first checking account will open up many new horizons for them. Stay on top of what they are spending and offer advice when necessary. The next step is to introduce the concept of budgeting. Now that they have money, and a place to put it, they will need to decide how they want to spend it.

This is a great opportunity to teach children about what to buy and how to determine whether or not a purchase is really worth the effort that went into earning that money. Grab a notebook and have your child draw up a wish list of what they would like to buy with that money. Once they’re done, you can go over the list and help them figure out what it will take to earn each item. Chances are, once they consider how many hours it takes to earn a pair of jeans, they’ll start gaining more respect for money and work.

Last but not least, it is vital to teach children how to grow their money. Open up an interest bearing savings account in your own name, and deposit their savings fund into it. Describe how the process works and keep them updated on how much interest they are earning. Again, this is a powerful motivator and can help a child learn more about how to make money when they are adults. All the work that you put in now will have a big impact on their future.

Photo Credits: 1

Originally posted 2008-09-22 05:33:26. Republished by Blog Post Promoter

Related Posts

Shopping Professionally pt 1 One of the best ways that you can save money is to shop professionally, which is learning how to develop skills and talents in shopping that allow you to shop smarter and save more money than ever before. When you learn how to work with a tight budget, you can......
Understanding Passive Income Streams Experts agree, one of the best ways to secure your financial future is by adding as many passive income streams as possible. However, there is a lot of confusion over what is meant by passive income streams, as well as how to go about it. Let's take a look at......
Do You Need an Accountant? The average person usually tries to struggle with their finances year after year and only visits an accountant a few days before their taxes are due. By this point, it’s up to the accountant to try to piece everything together and they won’t be able to offer much help when......
4 Tips to Getting Bad Debt Under Control If you are swimming in a sea of bad debt, keeping your head above water can be incredibly difficult. Thanks to our consumer culture, the availability of credit cards and a general lack of concern for what debt means, many people find that their bad debt is out of control.......
Supplementary Solutions for Debt Repayment There are a number of other things that you can do in order to improve your current money situation at the same time as you are working on the debt repayment solutions that we touched on in the previous three articles of this series. While you will be seeing results......

Related Websites

Coin Collecting and Your Kids Hobbies can be one of the best things to get your kids into, as there are plenty of different values that can be taken from hobbies like coin collecting and stamp collecting. Coin collecting can be an important tool for giving your children extra education beyond the classroom, but can......
Helping a Child With Their Coin Collection A coin collection can be an important and educational hobby for a child, as it provides a wide variety of benefits. You simply need to know how to emphasize these benefits. There are certain things that you can do, as a parent or grandparent, to make the collection as fun......
Should You Open Up Your Own Coin Collector Shop? If you have a serious love for coin collecting and for currency in general, you may consider opening up your own coin collector shop. There are hundreds of these shops across the nation, with each shop providing coin collectors with the portal that they need to expand both their collection......
Popular Beginner Woodworking Tips There are a number of woodworking tips, that when they are followed correctly, can really and truly enhance the quality of all of the finished woodwork that you create. These woodworking tips are designed to benefit not only novices but also expert woodworkers as well. Here are some of the......
How to Make Your Coin Collection Stronger As a coin collector, you should know that you can always make your coin collection stronger. Coin collecting is all about improving your collection and making your collection the best that it can be. This comes from the way that you showcase your coins to the way that you expand......