Teaching Your Kids to Value Money

Children and teenagers valuing money is a lesson lost altogether in the greater scheme of things. With MTV shows like Sweet, Sweet 16 hailing the spoiled life of rich teenagers on their quests towards self-indulgence and lack of discipline, it is easy for kids to run amok with their money. Children should learn the value of hard work and money. Today, money is thrown at kids who don't understand it comes from working a steady job and saving.

How do we go about teaching how kids how to value money? For starters, it is important for us to stress what the purpose of paying bills, holding a job, and keeping money in banks is. Introduce your children to the bill paying process by showing them your budget and telling them you have a certain amount of dollars per month to pay for the mortgage and electric bills. Teach them about the nuances of credit card interest rates and how mismanagement can lead to debt. In addition, you should take your child to an ATM machine and stress the fact they don't give money away for free.

In order to shift these lessons into high gear, it is wise to give your children an allowance. This way, they will have their own money to manage. Allowances come in many different payment schedules, such as bi-weekly, once a month, or according to a pay per chore plan where a few dollars is given for passing the vacuum or washing the dishes a number of times. One time-tested method is to designate a certain number of chores for a certain dollar amount every week. For instance, you can tell your child that they will earn a generous $60 a week if the dishes are washed all 7 days, the garbage is taken out 4 days, and the fish are fed every day. As a parent, it is savvy for us to jot down a list of chores along with a dollar amount. Don't be cheap! Offering .5 cents for washing a mountain of dishes every night won't teach your child anything.

After a steady allowance is granted, your children will want to throw their dollars at the latest gadgets. No problem! As long as your prioritize items according to importance, you are teaching the value of money. A piece of candy should never go ahead of a school uniform for example. Instructing your children to purchase important items like school paper or blank CDs for school projects (things you might normally buy) every once in a while teaches them that money shouldn't only be used for recreational purposes. In essence, teaching your child the value of money is one of the finest lessons a parent can instill.