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How to Teach Kids About Money

Do you want your kids to manage their money properly? Are you looking for ways to teach them about money so that they develop appropriate spending and saving habits? Research studies show that children develop money habits by the age of seven. Over 90% of kids observe their parents making monetary transactions. So, if you can make some effort, you can teach your kids about money. Here are a few tips. Read on!

Teach Kids the concept of money

The concept of money is important for kids. Introduce your children to coins first and teach them about their value. So, the general rule is that you have to buy them a few piggy banks where they can save their coins. It is essential to use a clear jar or piggy banks as this allows them to see the coins are growing day-by-day.

Set some examples

Parents are advised to lead by example. After all, kids follow their parents. Explain to them about your financial activities. For example, you can tell them about depositing a check, paying for groceries, and using an ATM card.

Don’t do certain actions in front of your kids, such as impulse purchasing. Keep in mind that kids are observant and will learn money concepts by watching and copying your behavior.

Learn the best ways to teach kids about money

Open a Savings Account

A savings account is one of the best ways to secure yourself financially. Considering its wide range of benefits, it is worth explaining to your children about compound interests and teaching them how a savings account can help them grow money. Also, teach them about different types of accounts and advise them to use a checking account once they are fully ready.

Provide an allowance

A recent research study has shown that about seven in ten American parents believe that it is a good idea to give allowance to children. It is, however, up to you to decide whether or not your kids should receive an allowance.

The important thing is that before you give them an allowance, make sure you teach them about basic budgeting tools. So, they can develop money management skills and learn to handle their allowance money.

Mistakes are good

Although it may seem a bit bizarre to you, when you allow your children to make mistakes, they will develop problem-solving skills. Thus, they will make better and informed decisions, which will help them in the long run.

Making mistakes does not mean wasting money. It is all about managing money and even if they have lost some money, it is helpful to encourage them and allow them to learn from their mistakes. Remember, confidence is key.

Allow them to earn money

Although it is not recommended to allow your kids to earn money at an early age, if they are at least 12 years old, you can allow them to earn some money online. Make sure you have parental security controls enabled on their PCs or laptops. If your kid is tech-savvy, then there is no harm in allowing him to earn money by creating logos or fill surveys.

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