How To Raise Money-Savvy Kids

How To Raise Money-Savvy Kids
by Takara Alexis

As an adult, there is one thing you know for sure about money-it is a limited resource. And yet, that's a message we have an extremely hard time passing down to our kids. Many of us-often because we feel parental guilt for hours working (or playing) outside the home, away from them-give our children a lot of the things they ask for, despite the fact that we may not be able to afford them.

You can do a few things from the time your children are little-before they go to grade school in fact-to insure they do not dive into this want-it, need-it, have-to-have-it circle. And don't worry if your children are passed that age. It's not too late to start to make these changes. It won't always be easy, but stick to it and they'll get the message: The Bank of Mom and Dad is no longer open for business.

Kindergarten or first grade is a decent time to start giving an allowance. By this time, your kid may have a school store to visit where he or she can buy pencils or other supplies. If not, chances are he or she will have plenty of exposure-through you-to other places to shop. Grocery stores, drug stores, dollar stores...all are full of things your child will be able to purchase.

You don't want your child to receive a lot more or less than his or her peers. You could also resort to basic averages, which start at about $1 each week in kindergarten and go up $1 for every year in school. But the best way to decide how much money you will give your child each week is to decide what you think that money will cover. Make a list, figure out how much each item costs and then present it-as a fait accompli-to your kids.

Whether you give your children an allowance, they work for their money, or they get cash gifts for birthdays and holidays, today is the very best time to tell them that at least 10 percent of their money should be saved.

You're not going to get very far if you attempt to strip them of their hard-earned pennies right from the beginning. A better method is to show them that the little things they already do are acts of giving. Smiling at someone on the street, sending a card to a friend and keeping a lonely relative company are all ways that they can help others.

Another idea is to go through an easy closet cleanup. Helping your child collect a bag of clothes or toys they've outgrown for charity not only serves multiple purposes, but it's a simple to give back. And because kids grow so quickly, it can be done several times throughout the year.