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Britt Erica Tunick is an award winning financial journalist who has spent the past 17 years writing about virtually every aspect of finance. She has mastered the art of boiling down complicated financial topics for readers to understand. |
Teaching your children about money at an early age is very important. That includes cash, credit and debit cards and how they work. The Importance of Teaching Kids to Save Money By Britt Erica Tunick It is never too early to teach children about money and how it works. And teaching children about money at an early age is more important than you might think. According to a recent study, “Spendthrifts and Tightwads in Childhood: Feelings About Spending Predict Children’s Financial Decision Making,” an individual’s mindset regarding spending and saving money is developed as early as five years old. Given this revelation, parents and grandparents would be well served by efforts to cultivate strong savings habits in children especially since many kids have access to a significant amount of money they can begin saving. From allowances earned for everything from making their beds to helping with chores around the house, to supplemental income from sources such as the tooth fairy and gifts from relatives, children in the United States earn an average $8.74 per week, according to Rooster Money, a website created to teach children about the importance of saving money by helping them electronically track their savings. And given that electronic payments are becoming more and more popular, it is as important to teach children about saving and managing money electronically as it is to teach them about putting physical dollars and quarters into a piggybank. Following are a few ways to help young children learn about managing money: First off, if you are not already giving your child an allowance, you should consider doing so and should establish what your child needs to do in order to receive that money such as making their bed, helping with a few chores around the house, etc. Needless to say, the chores expected of children should be catered to their age and ability. Make sure that allowances are paid on a specific day each week and not right after a chore is done. Explain to children that this is how paychecks are given so that they understand early on about waiting to receive money before they are able to spend it on anything. Teach children about credit cards and debit cards and how they work. One way to do this is to purchase an item with your child, and then show them how quickly it is reflected on your credit card statement. Use any online money management system designed for kids where they will receive interest on the money they save so that they are able to understand the benefits of saving money. |
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