How to Teach Kids Money Management With Chores
If your kids seem to think that breaking stuff isn̵7;t that big of a deal because you can simply replace it, it̵7;s time to start teaching them a little money management, which you can easily do with chores. It̵7;s not uncommon for your child to assume that you are the only thing standing between her and everything she wants, without realizing that finances even exist. To children without any sense of money management or financial sense, money does grow on trees. To prevent this attitude from creating a future full of financial faux pas, taking on a little household responsibility for allowance is an effective start.
Instructions
Provide your child with household chores that will help him learn the value of a dollar. According to Meridee Maynard, a financial literacy educator for Northwestern Mutual, paying your child an allowance in exchange for doing household chores is an effective way to teach your child the value of a dollar as well as money management skills. For example, if your child earns a $5 per week for feeding and walking the dog every day, he will begin to understand that money isn̵7;t free, which means he is more likely to appreciate it. Create age-appropriate chores for your child and pick a payday each week, advises the Bank of America website. For example, a child younger than 10 can earn money each week for putting away toys before bedtime. Older kids can be responsible for taking out the trash, emptying the dishwasher or helping with laundry. By designating at specific day for paying allowance to your kids for a job well done, they are learning what it̵7;s like to budget their money for a set amount of time, which is similar to the real world. For example, if you pay your kids every Friday, they will quickly learn that they cannot spend everything over the weekend or there will not be anything left until the following Friday, which means no fun after school. Open a savings account for your kids and make them put 50 percent of their earned allowance into their savings account each week, advises Bank of America. Money management includes teaching your children to spend wisely and save wisely. By having them save half of everything they earn, you are starting their financial future on a positive note and teaching them a habit to keep for life. Sit down with each child and discuss what his financial responsibility is. For example, if you decide that you will continue to pay for his basic needs, such as food, clothes and hygiene products, tell him. Discuss what financial responsibilities are his own, such as paying for the gas for his four wheeler and paying for any text messages he uses over the standard allotment on your cell phone plan -- or whatever applies to your family and your child̵7;s age. Talk to your child about what it means to get paid only on certain days. For example, if what is left of his allowance after contributing to his savings is all he will have for the next week, you need to explain to him that while it is his money to spend, he should be careful. If he knows he has to put gas in his own car this week to get to and from school and he spends all his money on a weekend trip with friends, he won̵7;t be able to buy gas or lunch until his next payday. By informing him of this, you are helping him understand that he has to budget, or set aside, what he will need for his financial responsibilities so that he doesn̵7;t spend that money on fun items and find himself in financial trouble for the rest of the week. Previous:Influence of Toy Ads on Children
