Kids and Family Finances – When and How

Money

Getting a feel for money begins early in schooling. 

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As adults, we take the concept of money for granted. We understand what it is, we understand where it comes from, we understand that we have to work for it and that it is not a good idea to waste it. Granted, most of us are not really familiar with the whole global finances thing, but we know enough. We also know that one can never have enough of it.

Because of all this, we often lose sight of the fact that the concept of money and family finances is completely new and strange to our children before we teach them about it. Sure, they might pick up on some of it even before we start talking to them about it but it is still something that our children need to be introduced to by us, the parents.

So, how do we do it the right way?

Playing Store

You probably played the game when you were young and there are pretty good chances that you child is doing the same. We are, of course, talking about playing store where he or she runs a store where people buy something. If you have more than one child, this often turns into an entire thing where one of them is the shop keeper while the other plays the role(s) of customer(s).

It is highly unlikely that your child will become a Wall Street broker just because they played store, but they will learn the basics of the whole money-for-goods exchange. It will introduce them to the very basics of the concept. If you want to be more in control of this early finances-adoption process, you can always take part in the game.

First Allowance

For most children, the first allowance comes around the age of 6 or 7 when they are already familiar with the concept of prices, buying things for money and so on. By this time, they probably already have their own toys or other things that they will want to buy and giving them their first allowance is a great way to further “plunge” them into the world of finances and family finances.

Explain to them why their allowance is as big as it is. Let them know that it has to do with how the family is doing financially (never scare them though) and that their allowance is perfectly reasonable. If some of their friends have bigger allowances, try and explain why this is the case.

Around this time, you might also open a savings account for your child and if you choose to do so, take them to the bank with you and turn it into an event of sorts. Teach them about interests and why it is a good idea to make regular deposits into their new account. Do not push anything, though.

More inclusion

As they get older and reach about 10 (mostly meaning that they stop being little foghorns when you take them to the grocery store), you can start including them in your weekly shopping trips, teaching them about comparison shopping. Teach them about comparing prices, brand-names and generic products, about calculating per-item costs and so on. If you see they are getting bored, ease up, try some other time.

More Advanced Finances

If you think that your child might be interested and when they reach a certain age (usually around 14,15) you can start teaching them about other financial practices, such as investing in stocks. There are different kinds of stocks out there and if you, for instance, want to teach them about penny stocks, you can find great information here. If you make investments yourself, let them in on the process. You might also want to teach them about real estate and charity, which can go well beyond just teaching them about money.

Closing Word

Not all children are the same. Some children will not be interested in money and family finances at all. Others will love to become involved. Depending on your child, you will make a decision how much to include them, as well as when and how. Never push it.

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