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Teaching the Kids Money Skills

Money Skills for Kids

There is no shortage of what we have to teach our children and we certainly need to concentrate on life skills that are going to carry them forward into their future.   Part of these life skills is  teaching them money management, and it is often the question as to at what age do parents start with this form of teaching.

It basically comes down to setting the example.   If the children see parents constantly spending and then fretting over not having enough money, this really isn’t setting the groundwork for the kids to develop their own good spending habits.

So it all begins with setting the example. The next factor that can come into the money teaching aspect is setting the limits for what the children need and want.  As parents we like to spoil our children and give them everything that they ask for, but this really isn’t doing them any great benefit for their adult years.  Children that are used to getting whatever they want when they ask for it, assume that in their adult years that they can just go ahead and buy whatever they want and worry about the consequences later.   This is because they have been shielded from their parents when it comes to overspending, as the parents don’t want to burden the children with financial matters.

One of the most significant signs that many young people have difficulty with money management is when they are in college and university and even though they have a budget to work with, they more than often run out of money or fall short and have to rely on their parents for extra cash.

There are many ways that children can be encouraged to earn their own money through doing side chores outside of the home.   This can include yard work, snow shoveling, small paint jobs, and even selling crafts that they make or walking dogs and pet sitting.   While they may be encouraged to earn this part-time money they should also be encouraged how to handle it properly when they get paid for their work.   Establishing this early in life will help the children to develop a pattern of being financial responsible and putting money aside rather than spending everything that they get.

Statistics have shown that kids who learn to be savers also become savers as adults.   The money management lessons that a parent can teach can be fun innovative and interesting.   It shouldn’t become a drudgery where the kids are going to balk at what the parents are trying to institute in them.   If they adopted this type of attitude then once they gain their own freedom they may tend to be big spenders because they have been restricted for many years of their life when it comes to money matters.

 

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Sam Seidman, CPA, CA, LPA
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