Formal education does a great
job of teaching children how to read, write, do math, and determine the
age of the earth using mass spectrometry, but theres one lesson that
still falls on the shoulders of parents to teach, and thats financial
responsibility. Until there is a classroom devoted to budgets, savings
accounts, and investments, parents will need to continue to think of
creative ways to impart their monetary wisdom. Use these five fun tricks
to help make the lessons stick and help make your kids financially
independent.
1. Piggy Bank
A piggy bank should be a
fixture in every childs room. Theyre as important as a night light or
pajamas with feet built into them. Every chance you get you should drop
some change inside, shake it up, and act like it is the greatest thing
in the world. Your child may not fully appreciate what is going on at
first but eventually they will develop a sense of ownership over their
money and create positive memories and attitudes around saving.
2. Lemonade Stand
Tried, tested, and true, the
lemonade stand is not only a classic memory for every child, it teaches
important lessons about money. By dishing out lemonade to passersby
(with adult supervision, obviously) a child can quickly learn basic
lessons about supply, demand, and managing income and expenses. Fresh
lemonade may taste better and draw a bigger crowd, but nothing
multiplies your margins like lemon crystals from a package. Do this
right and lend a hand where necessary and you will have a little
entrepreneur on your hands in no time.
3. Allowance
Starting from around the age
of five you can bring an allowance into the equation. Sit your kids down
and have a conversation about responsibility and pitching in around the
house in exchange for a little money at the end of the week. An
allowance should be your childs first experience with steady, reliable
income and it opens the door to many more lessons about the different
uses of money, that things are earned and not an entitlement, and the
idea of money as a finite resource.
4. Saving, Spending, Sharing Jars
A great way to drive home the
finite nature of money is to expand the notion of the piggy bank to
create separate saving, spending, and sharing money jars. Again, this
works best with an older child who is getting an allowance. The way it
works is each time your child gets some money, they are responsible for
dividing it into each of the three jars. The spending jar is for things
like candy bars and water guns and other small expenses that pop up
during the week; the sharing jar is for buying birthday gifts and nice
surprises for friends and family; and the saving jar is off limits for
everything but larger, longer-term expenses like a new Lego set or video
game. The saving jar transitions nicely into the eventual savings
account you should open with your child at the bank.
5. Offer and Encourage Ways to Earn More Money
Finally, if you child has
their eye on some extravagant item like roller skates or a new bike but
is getting frustrated at saving towards it with a $5 or $10 weekly
allowance, give them other opportunities to increase their income. Put a
price on household jobs that arent part of their regular chores. Clean
the attic and make an extra $10. Mow the lawn and that is $5 in your
pocket. Even help your kids offer their services to your trusted friends
around the neighborhood. This will help instill a strong work ethic and
a mental connection between effort and reward.
Comments
Post a Comment