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An Essential Guide for Teaching Kids About Money

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An Essential Guide for Teaching Kids About Money

 

Some parents think that it is difficult to teach kids about money because of their young age. They leave their children to grow up until they start learning about this important concept on their own or from peers. Contrary to the view of many parents, Dr. Jayne A. Pearl, says that it is so easy to give children financial education. She adds that changing your daily activities into learning experiences can help a lot in teaching kids about money. Such activities include visiting a bank or Automatic Teller Machine (ATM). 

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Such an environment is the best for discussing your financial issues. For instance, how you get and spend money. It is possible to instill concepts of money into the brain of your children especially when they are young. They will begin to imagine many things about money and why it is important. They will also try to understand why people must work hard to get money. This can be achieved in a manner that involves a lot of fun. Pretend that you are at the cashier in a restaurant, receiving money from clients. You can also play other games as long they involve use of money.

Ages 2 - 3

Research shows that when a two or three-year-old child is presented with nickel, penny or dime, he is most likely to select nickel because of its size. According to experts, while many kids may not understand the value of money at this age, they can begin to learn about some names of coins. This can be achieved by playing coin identification game. 

Together with your child, you can trace the exterior of different coins of varying colors and shapes. You can then ask your child to match the coin to the appropriate image. The image should assume the shape of coins. As you do this, also discuss the names of different coins. Your child will begin to learn how they are called besides knowing their shapes. Caution should be taken when playing this game because some kids may be tempted to swallow coins. Such kids need close supervision. You can also show your child different notes and make him/her try to understand their value. Tell your son/daughter why $100 note has more value when compared with $1 note.

Kids love what shopkeepers to. You can modify a shop in your living room. This is an interesting way to stimulate your child’s imaginative skills. An expert suggests that when you begin to exchange money meant for playing for goods in the house, your child will begin to know some basics of commerce. This is very important. Recommended items you can use are soap, toilet paper, toothbrush, toothpaste, pencil and more. Together with your kid, pretend that you are the buyer and he is the seller; do it until all the items are finished.

Ages 4 -5 

Before going to the supermarket, you should ask your child to help you clip some coupons. You are advised to use safety scissors. Get into the store, give her the coupons and tell her to watch out for the products. She will begin to feel as if she is helping but in the real sense, you will be teaching her about the importance of saving. 

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Tell her why it is good to save money when going out for shopping. This will prevent her from becoming a spendthrift.

Majority of preschoolers prefer to play imaginary restaurant in their homes rather than going for dinner outside home environment. This helps to promote many skills in your child. For instance, setting the table, observing table manners and more. Doctors advise that you should remind your 4-year-old child after pretend meal to pay the bill. She continues that once children know the concept; they will become excited when they play using pretend money or when they return change the way cashiers do. You will be instilling in them important knowledge about finance.

Ages 6-8 

One parent suggests that any kid that receives allowance requires a place to keep his money. You should organize for a trip to the bank with your child. Assist your child to open a savings account. Encourage him/her to make deposit anytime he gets money. As the account balance increases, talk about interest. Tell your son/daughter how interest is earned on money deposited in the bank. There are many banks that charge zero fee on children accounts. They are fit for kids.

This is also the best age to make them make coin collection a hobby. You can also go through children’s section on the US mint website. Teach your children about how your current (and international) currency evolved. You can also keep your child engaged through cartoons and games available on the internet. 

Ages 9-12

One of the best ways to teach comparison shopping is to read the price labels in the store with your child. You should also check size, price and then try to compare how different quantities of goods differ in price. Quality should also be taken into consideration.

There are some special events that are organized in the entire US. For example, garage cleaning. On such days, let your child be in charge. He will learn many values and be able to make informed decisions. He will also help you to bargain prices with customers.

Age 13-15

At this age, it is not too early to teach your children about stock market. Pretend that you have invested in companies that your child knows or is familiar with. For example, Microsoft, IBM, Facebook, Google and more. An expert in Economics suggests that you should make every family member develop a habit of selecting stocks. You should then watch financial news or read newspaper containing latest news about finance. Discuss how the stock value fluctuates. 

When it comes to meals, help your kid create a budget by discussing basic needs and why it is important to create a scale of preference. Let him/her learn to prioritize what should be satisfied first in case of limited budget.

Ages 16 And Above

As a parent, you can use simple tools such as store valued cards like American Express Cobalt card or Visa Buxx to teach your son/daughter lessons about financial responsibility. Your child can use the cards to make payment without using credit card or cash. However, this is a good time to teach your child (again) about the implications of interests and why it would be best not to ever use credit cards. What you need to do as a parent is to load the card with certain amount of money that matches the budget allowance of your child. This way, s/he will learn not to be overburdened with interests and debts.

According to experts, you should encourage your children to begin donating to charity organizations Tell then about reputable charity organizations in your community and worldwide and help them select a few.

Bottom Line 

Up to this end, you now know how you can teach your children about money depending on their age bracket. These methods are kid-friendly and effective. They will make your kid achieve financial independence when he/she grows into an adult. You are advised to put them into practice for the benefit of your child.

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