To teach kids about money consider using Dave Ramseyâ€™s teachings. Dave Ramsey advocates that debt is dumb and cash is king. Starting your kids out early with these money lessons can help shape their views about money their whole life.
Teach Kids About Money â€“ Concepts
Early on teach your kids that money has a value. Show them that in order to buy things they have to have money. Let them watch you purchase items in stores and understand that you are giving something of value in order to get something of value in return.
The hardest concept for young kids to understand is where money comes from. Try conveying to them that you have to go to work every day to earn enough money to buy things. One good way is to show them that you worked all day to buy a weeks worth of food. A concept like that is easier for them to grasp.
The next step to teach kids about money is to actually give them some money in the form of an allowance. At a younger age this should be for pretty simple things such as helping you pick up or let them dust or push the vacuum around. Dave Ramsey always advocates that there should be two sets of chores. Those that earn them an allowance versus those that are expected. Expected chores donâ€™t earn an allowance, rather they are expected as a condition of being a member of the household. These can include taking their dishes to the sink, putting their clothes in the hamper, and hanging their coats up.
Teach Kids About Money â€“ Give/Spend/Save
You will then want to teach your children what to do with their money. Dave Ramsey advocates three things: give, save, and spend. You can come up with a ratio you feel comfortable with and then teach your kids how to do all three.
Teaching your kids to give money will help them realize that they need to help those less fortunate than they are. Countless studies have shown that people who give lead happier lives. This is a great thing to teach your kids about money.
Savings is a great thing to start early. Showing kids how to save will allow them to better manage their money as they get older. Since many items kids want to purchase are more expensive than their weekly allowance, they will benefit by learning to save for what they want.
Proper spending is both the most important and most difficult thing to teach kids about money. Helping them understand that they only have so much to spend and to pace themselves is hard. Most kids (and even most adults for that matter) are impulse buyers. The best way to break them of this is to let them impulse buy and then later on when they find something they really want, help them understand that if they hadnâ€™t bought the â€œjunkâ€ in the checkout line they would have the money they need.
Teach Kids About Money â€“ A Lifelong Lesson
To teach your kids about money is an overlooked thing, but hopefully if more parents start at a younger age their kids will grow to be responsible with their money when they are older.