One of the most important lessons we can teach our children is how to manage and save money. Start by setting a good example. Talk to your preschooler about money in simple terms and let them in on casual conversations about household finances. When our X-Box broke and my three-year-old son asked if we could go to the store and buy a new one so he could watch a movie, I took the opportunity to teach a lesson. I explained to him that we pay for necessities like groceries first before we purchase things for fun and that we needed to save up for items like a new DVD player. At our house there is no such thing as instant gratification. Planning and saving for "luxury" items makes them that much sweeter.
Giving your child an allowance for doing chores is sometimes debated. Many parents question: "Why pay your preschooler for helping out around the house?" While it's important for each family member to pitch in with household tasks whether or not they are getting paid, there is something to be said for allowance structures. Use it a lesson in life skills. Even if you are only paying your child $.25 a week for putting his or her own clothes into the laundry basket, keeping their room neat or setting the table each night you can instill a good work ethic while giving a lesson on money.
Perhaps your child has his eye on a particular toy. You an print out a photo of the toy and create a balance sheet to keep track of your child's earnings in relation to his goal. Your child can view his progress and be proud of his efforts in earning, saving and eventually purchasing his own toy. With older children or those with bigger goals, you might want to check out SmartyPig.com. There you can create goals online, earn interest and track your progress. Gifts can even be received through SmartyPig when goals are shared with friends and family members. Grandparents might want to make a contribution as a birthday gift or a parent might want to reward their child for good grades. Alternatively, setting a family goal that the entire family can work towards is a great way to bring everyone together. Show them how that family trip to Disneyland you've always wanted to take can be achieved when you make an effort to save.
It's never too early to teach our children life skills regarding money. Start now and give them the knowledge they need to succeed later on in life.
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