3 Easy Ways to Teach Your Kids About Money

3 Easy Ways to Teach Your Kids About MoneyWhen it comes to talking to your children about money, it’s never too early. Helping them practice now will prepare them for handling finances skillfully in the future. Although your method of teaching will vary depending on age and temperament, here are some of the basics.

Give children a regular allowance. This will teach your kids to manage a regular income. Decide how long between payment intervals (such as a week or a month) and the amount they should receive. Family dynamics and financial means should be taken into consideration.

Give them guidance and conditions. For instance, you may require they put a percentage aside for savings, but suggest more. Explain to them that they can spend some now, but they can also save for something better later. This way, they learn that even though they want candy now, if they say no, they can buy a toy in a few weeks. Delayed gratification will prepare them for adult choices, like buying a latte or saving for a car. You also may want to encourage them to set aside a percentage to donate to charity. This teaches selflessness and a realization that they can make an impact on the world.

Allow them to ask for raises. As your kids get older, hear them out when they think that they should receive more money for their allowance. Negotiate with them. By listening to their arguments and giving rebuttals, you help them understand what the money means to them. This will also prepare them for the workforce. Listening to their requests doesn’t mean you’ll grant them, of course. Before giving a raise, discuss possible changes in terms with them. When did you last increase their allowance? How much will you raise it? Will they then be expected to pay for more of their own things? Will they have to do more chores in order to earn it?

Kids will benefit from an allowance. They get the immediate reward of spending money, the anticipation of saving for an exciting item later, and the knowledge that they can help someone else. Reward, responsibility and generosity are all reinforced for your children. They gain money management skills and will be more prepared for financial responsibility as they grow up.

If your child has outgrown the piggy bank, ProFed has S.T.A.R. (Saving To Achieve Results) accounts and EZ Saver Share Certificates so they can save with the security of the credit union and earn higher dividends. Come in to any branch to make deposits, and then watch the balance grow with ProFed Online Banking. Visit your nearest branch to learn more.

In addition, here are some resources to point you in the right direction.

        The US Government has tips and resources for parents and games for kids.

        Don’t forget to check out your local library and bookstores for helpful books!

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