Money and Children

It is very important for children to understand the value of money. As a parent, you must start training your child on this as early as possible. Pre-teens is ideally a good age for you to make her understand the concept of money and its importance. She must understand that money is hard earned. It is a good idea to teach your pre-teen child money management skills by giving her a fixed monthly allowance. This allowance is also referred to as pocket money by some parents. Usually children who realise the value of money grow up to be more responsible both financially and in other walks of life in the later years. After all, one cannot forget the saying "A penny saved is a penny earned".


Money and Children

18 ways to help your pre-teenager learn the art of managing money
  • Do not pay your child an allowance for completing chores that are expected of them. However, you can pay them an allowance for helping you with your chores.
  • Be consistent in giving the allowance. For example if you are giving her an allowance on the tenth of a month, remember to always give her the allowance only on the tenth of each month.
  • Do not insist that your pre-teenager should save all the money that she earns. Your child must spend some money, for her to learn about it. Spending money unnecessarily may mean that she may not have enough when she wants it. This will teach her to use her money wisely.
  • Encourage your pre-teen child to prepare a budget and teach her to stick by it. Tell her firmly that you will not give her more than what she has in hand.
  • So long as the money you give your pre-teen child is not used for an illegal activity, do not restrict her from using it for whatever she wants.
  • Guide her on careful spending rather than dictating to her how to spend the money. Also always encourage her to be more careful next time rather than criticising for wasting her money.
  • Make her understand that financial security plays an important role in marking her independence.
  • Teach your child to differentiate her "needs" from her "wants". Usually her "needs" will be lesser than her "wants".
  • Open a bank account in your child's name and deposit some money in that account periodically.
  • When you find something that your child wants is beyond your budget, go for a suitable lesser alternative. You can tell her "This will work just as fine." instead of "I cannot afford."
  • Get her a piggy bank and encourage her to put the money left after spending on her needs into it. This can help her understand the concept of saving.
  • Buy your child money games such as Monopoly and play them with her. This can be fun and also teach your child to value money.
  • When you go shopping, take your pre-teen with you. Ask her to pick up the items that she needs. If she picks up two pens with the same feature, teach her to compare prices and make a choice.
  • Make your child understand what borrowing is and why it is not good to borrow from others. Discourage the practice of living on credit.
  • Avoid talking in front of your pre-teenager about others' belongings and how you wish they were yours. This may make her feel that material pleasures are more valuable than money.
  • Teach her to keep a track of the items that she buys along with the money spent on each item. Make her show you this list of expenses.
  • Set yourself as an example to your children about how money can be spent wisely. You can tell them how you earn your money and give them examples on how you spend it.
  • Whenever you pay your bills such as the electricity and telephone bills, make sure that your pre-teen child knows about it. Also, make sure that she knows the amount that you are going to pay.
  • You must remember to never use money as a source of reward or punishment. Also do not forget that it can take a lot of time to make your pre-teenager understand the value of money. However you will find that it is worth the time spent in her later years